What happens when the supply of a nonperishable good is greater than what consumers want to buy?
a. the good is discarded
b. the good becomes a luxury and the price rises
c. either the good is saved for later sale or the price is raised
d. either the good remains unsold or the price drops
Ans: d. either the good remains unsold or the price drops
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Using aggregate demand and aggregate supply, explain what happens in the short run if the Federal Reserve raises interest rates in the economy. Be sure to detail what happens to aggregate demand, the price level, the level of GDP, and unemployment
Assume that the economy is at full employment before the interest rate increase.
A country reported nominal GDP of $200 billion in 2010 and $180 billion in 2009 . It also reported a GDP deflator of 125 in 2010 and 105 in 2009 . Between 2009 and 2010,
a. real output and the price level both rose. b. real output rose and the price level fell. c. real output fell and the price level rose. d. real output and the price level both fell.
"… two prostitutes came to the king (Solomon) and stood before him. One of them said, ‘My lord, this woman and I live in the same house. I had a baby while she was there with me. The third day after my child was born, this woman also had a baby. We were alone; there was no one in the house but the two of us.During the night this woman's son died because she lay on him. So she got up in the middle of the night and took my son from my side while I your servant was asleep. She put him by her breast and put her dead son by my breast. The next morning, I got up to nurse my son-and he was dead! But when I looked at him closely in the morning light, I knew that it wasn't the son I had borne.'The other woman said, ‘No! The living one is my son; the dead one is yours.'The king said, ‘Bring
me a sword.' So they brought a sword for the king. He then gave an order: ‘Cut the living child in two and give half to one and half to the other.'The woman whose son was alive was filled with compassion for her son and said to the king, ‘Please, my lord, give her the living baby. Do not kill him; she is his mother.'But the other said, ‘Neither I nor you shall have him. Cut him in two!'Then the king gave his ruling: ‘Give the living baby to the first woman. Do not kill him; she is his mother.'" 1 Kings 3:16-27 (NIV).King Solomon's actions in this passage illustrate the concept of: A. adverse selection. B. signaling. C. screening. D. moral hazard.
An elasticity that would be considered only slightly inelastic would be
A. 0.1. B. 0.9. C. 1.0. D. 1.1.