The Keynesian contention that the short-run aggregate supply curve is horizontal is based on the assumption that there are
A. upward sloping prices.
B. sticky prices.
C. real prices.
D. flexible prices.
Answer: B
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The cross elasticity between two goods has been measured at ?1.2. How are the goods related? Explain. Give an example of goods for which this might be a reasonable measure of cross elasticity.
What will be an ideal response?
If demand is price elastic, then when price decreases, total revenue
a. decreases b. increases c. does not change d. is less than one e. is negative
The fractional reserve system of banking evolved because
a. goldsmiths did not have safes large enough to hold all their gold deposits. b. there was always a dire need for additional money. c. goldsmiths knew that on any given day, only a few depositors would come to claim their deposits. d. goldsmiths knew that they would not be prosecuted for lending out money they did not have.
If a person has a comparative advantage in some activity, she must have an absolute advantage in that activity as well
Indicate whether the statement is true or false