The cross price elasticity of demand for a good x is the percentage change in the quantity demanded of good x in response to a given percentage change in
A) income.
B) the price of good x.
C) the price of good y.
D) the quantity demanded of good y.
C
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The vertical classical aggregate supply curve reflects that
a. money wages adjust proportionally with the price level. b. real wages are always the same. c. aggregate output is always the same. d. None of the above. e. Both b and c.
Suppose you are the manager of a local water company, and you are instructed to get consumers to reduce their water consumption by 10 percent. If the price elasticity of demand for water is 0.25, by how much would you have to raise the price of water?
a. 10 percent b. 25 percent c. 40 percent d. 100 percent
Once macroeconomic equilibrium has been established in an economy, there is no tendency for real GDP to change, even if there is a change in autonomous expenditure
a. True b. False Indicate whether the statement is true or false
Events of the 1970s and early 1980s showed that
A) the Phillips curve presents policymakers with a stable menu of choices. B) cycles of unemployment and inflation rates appear to have gravitated around a 6 percent unemployment rate. C) lower inflation rates are consistently accompanied by higher unemployment rates. D) a tradeoff between inflation and unemployment may not always exist. E) a and c