Suppose there is no change in total revenue when the price changes. The demand curve for this good is:
A. perfectly elastic.
B. perfectly inelastic.
C. elastic.
D. unitary elastic.
Answer: D
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Which statement is NOT true regarding emerging markets?
A) Emerging market financial institutions have generally proven to be weaker than those in industrialized countries. B) Emerging markets are the capital markets of poorer, developing countries that have liberalized their financial system to allow private asset trade with foreigners. C) Countries with emerging markets include Brazil, Mexico, and Thailand. D) Countries with emerging markets have been unable to liberalize their financial systems to allow private trade with foreigners. E) Emerging market financial institutions contributed to the financial crisis of 1997-1999.
Full employment is the rate of employment that results when
a. all labor resources of an economy are employed. b. there is efficient use of the labor force, with allowance made for normal unemployment due to dynamic changes and the structural conditions of the economy. c. cyclical unemployment is between 4 and 5 percent of the labor force. d. everybody who wants a job can find one.
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and current international transactions in the context of the Three-Sector-Model?
a. The GDP Price Index rises, and current international transactions become more negative (or less positive). b. There is not enough information to determine what happens to these two macroeconomic variables. c. The GDP Price Index rises, and current international transactions become more positive (or less negative). d. The GDP Price Index and current international transactions remain the same. e. The GDP Price Index falls, and current international transactions become more negative (or less positive).