Most money in the US is created when
a. commercial banks make more loans
b. commercial banks increase their liabilities
c. the US Mint prints more US currency
d. Investment banks increase their number of IPOs
Answer: a. commercial banks make more loans
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If the price of motel rooms increases by 10% while the prices of other goods and services increase by 5% on average, the relative price of motel rooms has:
A. decreased by 5%. B. decreased by 10%. C. increased. D. remained constant.
Economic growth in Cuba has been slow. What can best explain the slow growth?
A) lack of incentive mechanisms and economic freedom B) lack of economic resources C) labor productivity is low. D) too much competition within the economy E) a non-democratic form of government
A 3 percent increase in the price of cotton leads to a 6 percent decrease in the quantity demanded of cotton. The absolute price elasticity of demand is
A) 3. B) 2. C) 0.5. D) 0.33.
A tax is imposed on orange juice. Consumers will bear no burden from this tax if the: a. demand for orange juice is perfectly inelastic
b. supply curve for orange juice is unit elastic. c. demand for orange juice is unit elastic. d. supply curve for orange juice is perfectly inelastic.