How do you interpret the value of cross-price elasticity?
What will be an ideal response?
If cross-price elasticity is negative, the two goods are complements, while if cross-price elasticity is positive, the two goods are substitutes.
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Contractionary fiscal policy to prevent real GDP from rising above potential real GDP would cause the inflation rate to be ________ and real GDP to be ________
A) lower; lower B) lower; higher C) higher; higher D) higher; lower
If the monetary policy curve is correct, then policy makers care only about inflation and not at all about aggregate output and unemployment. Comment
What will be an ideal response?
Brand Name Drug Industry Dynamics Market approval in the US for new pharmaceutical products is a long, arduous, and expensive process. Once approved, patent protection keeps close substitute products from entering for some years. If the demand for a particular product is stable, what would you predict for the profitability after approval and prior to patent expiration?
Which of the following is true regarding economic fluctuations in the United States?
a. Since World War II, economic ups and downs have been more moderate than before the war. b. Prior to World War II, real GDP annual increases of more than 5 percent were unheard of. c. Real GDP grew rapidly during the 1930s. d. The 1920s was a period of prolonged economic stagnation and high unemployment.