Price elasticity is a measure of how
A. quickly a market will respond to a change in market conditions.
B. much consumers or producers respond to a change in market price.
C. much a market responds to a change in market conditions.
D. quickly consumers or producers respond to a change in market price.
Answer: B
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
After the imposition of a tax of $2 per unit of output, what is the profit maximizing price?
A) 11 B) 21 C) 31 D) 41 E) none of the above
A nation's country-risk premium increases if:
a. Expected inflation becomes harder to predict. b. The average maturity structure in the nation rises. c. None of the above d. Central bank policies become more predictable. e. All of the above.
If the rate of technical progress decreases, then the growth
A. of the labor force will decrease. B. of the capital stock will decrease. C. rate of potential GDP will decrease. D. rate of unemployment will decrease.