The law of demand is illustrated by a demand curve that is:
a. Vertical
b. Downward sloping
c. Horizontal
d. Upward sloping
b. Downward sloping
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What are the main determinants of demand elasticity? Explain their importance.
What will be an ideal response?
As a percentage of GDP, the federal government expenditure which is expected to increase the most between 2012 and 2042 is
A) Social Security. B) Medicare and Medicaid. C) the net interest on the federal debt. D) national defense.
Increases in ________ typically lead to decreases in private saving
A) the interest rate B) disposable income C) autonomous consumption D) all of the above E) none of the above
Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and current international transactionsin the context of the Three-Sector-Model?
a. The GDP Price Index rises, and current international transactionsbecomes more negative (or less positive). b. The GDP Price Index and current international transactionsremain the same. c. The GDP Price Index falls, and current international transactionsremains the same. d. The GDP Price Index falls, and current international transactionsrises. e. There is not enough information to determine what happens to these two macroeconomic variables.