If the favorable supply shocks of the 1990s were reversed in the future, we should expect a(n)
A. increase in inflation and unemployment.
B. decrease in inflation and unemployment.
C. increase in inflation and a decrease in unemployment.
D. decrease in inflation and an increase in unemployment.
Answer: A
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Suppose the quantity demanded of milk increases by 15% when milk prices are decreased by 3%. The price elasticity of demand for milk is
A) elastic and equal to 0.2. B) inelastic and equal to 0.2. C) elastic and equal to 5. D) inelastic and equal to 5.
Per capita GDP measures both market and nonmarket production
Indicate whether the statement is true or false
Which of the following defines the face value of a bond?
a. The amount that the bond issuer agrees to pay the investor b. The rate of return a bond is expected to pay at the time of purchase c. The current price of a bond at a given time d. The interest rate paid on a bond either annually or semi-annually
In 1968, the government instituted a 26 percent income tax surcharge. In terms of the AS/AD model, this change should have:
A. shifted the AD curve to the right. B. shifted the AD curve to the left. C. made the AD curve steeper. D. made the AD curve flatter.