The more time people have to adjust to a price change:
A. will not affect the elasticity of their response unless it is a luxury good.
B. the less elastic their demand will be.
C. the more elastic their demand will be.
D. will not affect the elasticity of their response unless the good is a necessity.
Answer: C
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
The FDIC helps prevent
A) inflation. B) bank runs. C) risky behavior on the part of bankers. D) risky behavior on the part of depositors.
An increase in the required reserve ratio would be
a. a restrictive policy because it lowers the amount of total reserves in the banking system. b. a restrictive policy because it lowers the amount of excess reserves in the banking system. c. an expansionary policy because it raises the amount of total reserves in the banking system. d. an expansionary policy because it raises the amount of excess reserves in the banking system. e. an expansionary policy because it raises the amount of required reserves in the banking system.
What type of relationship do business taxes have with respect to Investment spending?
A. Constant B. Secondary C. Negative D. Positive