The cross-price elasticity of demand of products "A" and "B" is zero. This implies that "A" and "B" are
A) substitute products.
B) complementary products.
C) independent products.
D) unique goods, as the price elasticity of demand for one of them is zero.
Answer: C
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The idea that the production function exhibits _______ implies that ________
A) diminishing returns; the Lucas Wedge increases at output increases B) diminishing returns; each additional unit of labor employed generates an ever-decreasing amount of real GDP C) increasing returns; potential GDP is always increasing D) increasing returns; output should increase steadily as technology grows E) constant returns; each additional unit of labor employed generates an increasing amount of real GDP
Suppose the euro—yen exchange rate falls while the dollar—yen exchange rate rises. What happens to the price of goods imported into Japan?
A) European goods become more expensive while U.S. goods become cheaper. B) European goods become cheaper while U.S. goods become more expensive. C) Both European and U.S. goods become more expensive. D) Both European and U.S. goods become cheaper.
Suppose the required reserve ratio is 8%, excess reserve-to-deposit ratio is 2%, and the currency-to-deposit ratio is 10%. What is the value of the money multiplier?
What will be an ideal response?
If consumption is given by C = 300 + .6 (Y-T) and I = 300 – 40r, the IS curve is
a. Y = 600 – 2.4T – 40r + G. b. Y = 600 + .6Y -100r – G c. Y = 1500 – 1.5T – 100r + 2.5G d. Y = 1500 + .6T – 100r – G e. none of the above.