An increase in total revenue will result if
A. demand is inelastic and price increases.
B. demand is unitary elastic and price decreases.
C. demand is elastic and price increases.
D. demand is inelastic and price decreases.
Answer: A
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Political candidates often hold fundraisers by charging "per plate" for dinner. Wendy purchased four tickets to a $1,000 per plate dinner for a local city council candidate. Does this transaction benefit both parties?
A) Yes, but only if the dinners served actually cost $1,000 each. B) Yes, it was a voluntary exchange that benefited both parties. C) No, political candidates should never be allowed to overcharge for a fundraising dinner as that limits the number of people who can afford to attend. D) No, Wendy paid too much for four dinners.
In a stock market boom ________
A) autonomous consumption might increase because stock holders might feel richer and consume more B) autonomous investment might increase because a higher stock value for a firm helps firms raise funds for increased investment C) the IS curve might shift to the right D) all of the above E) none of the above
If the transactions approach to measuring money is used, then the money supply consists of
A) currency only. B) transaction deposits only. C) currency and transaction deposits only. D) currency, checkable and debitable deposits, and traveler's checks.
How might fiscal policy be used to correct an inflationary gap?
A) The exchange rate would be adjusted to encourage imports. B) The exchange rate would be adjusted to discourage imports. C) The interest rate would be adjusted to encourage saving. D) Taxes would be increased to reduce aggregate demand.