Which of the following is likely to have the most price elastic demand?
a. clothing
b. blue jeans
c. Tommy Hilfiger jeans
d. All three would have the same elasticity of demand because they are all related.
c
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The Hatfields and the McCoys both earn $50,000 per year in real terms in the labor market, and both families are able to earn a 25% real interest rate on their savings. Assume that all interest is paid out as income in the following year. In the year 2010, both families began to save. The Hatfields saved 8% of their income each year; the McCoys saved 10%. In 2010, the Hatfields consumed ________ more than the McCoys; in 2011, the Hatfields consumed ________ than the McCoys.
A. $2,000; about $250 more B. $1,000; about $800 more C. $2,000; about $250 less D. $1,000; about $800 less
The Personal Consumption Expenditure Index is also known as the GDP deflator
a. True b. False Indicate whether the statement is true or false
Answer the following statements true (T) or false (F)
1. When there is an increase in aggregate demand in the short run, there will be an increase in the price level but not in the level of output or employment. 2. When the economy is experiencing demand-pull inflation, its real GDP tends to be rising. 3. The oil crises of the 1970s and 1980s can best be illustrated as a shift of the aggregate demand curve to the left. 4. Cost-push inflation can be described as a rightward shift of the aggregate supply curve. 5. Minimum wage laws tend to make the price level more flexible rather than less flexible.
If an American can purchase 40,000 British pounds for $90,000, the dollar rate of exchange for the pound is:
A. $0.44 B. $0.23 C. $2.25 D. $2.00