Which of the following statements is true of the price elasticity of? demand?
A) As the number of substitutes for a product increases, the price elasticity of demand for that good decreases.
B) If the budget share of a particular good in a consumer's bundle increases, the price elasticity of demand for that good is likely to decrease.
C) The price elasticity of demand for a good is generally higher in the long run than in the short run.
D) The demand for a good with a price elasticity of demand of zero is highly responsive to price changes.
Ans: C) The price elasticity of demand for a good is generally higher in the long run than in the short run.
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Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________. 
A. Rising; A B. Falling; A; C C. Falling; B: C D. Rising; A; C
If the Fed raises the federal funds rate,
A) investment increases. B) real GDP increases. C) exports increase and imports decrease. D) exports decrease and imports increase. E) in the short run the interest rate falls.
The producer price index is considered a good predictor of future consumer prices because increases in input prices:
A. eventually make it to consumers when they buy the final product. B. are accounted for in PPI, and therefore this automatically adjusts the CPI. C. are observed first in the PPI, adjusting the CPI downward. D. are used by consumers to make decisions on what to buy.
In the short-run, following the opening of trade
A. groups tied to declining sectors of the economy will suffer from lower returns. B. workers will suffer from lower wages, but landowners will benefit from higher rents. C. workers in the country can change jobs but will receive the same wage. D. gross output remains constant.