Keynesian economics focuses on:
A. both the long run and the short run.
B. the long run.
C. the short run.
D. neither the long run nor the short run.
Answer: C
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A value of the absolute price elasticity of demand equal to 0.6 indicates that
A) a 6 percent increase in price leads to a 10 percent decrease in quantity demanded. B) a 10 percent increase in price leads to a 6 percent decrease in quantity demanded. C) a 0.6 percent increase in price leads to a 1 percent decrease in quantity demanded. D) a 1 percent increase in price leads to a 6 percent decrease in quantity demanded.
Holding other things constant, a decrease in the inflation rate in the US compared to the Canadian economy may cause the demand for the US dollar to _____________ and the supply to __________
a. Increase; decrease b. Increase, increase c. Decrease; Increase d. Decrease; Decrease
Which of the following is true?
a. An increase in the interest rate will tend to increase stock prices. b. A reduction in the interest rate will tend to increase stock prices. c. An increase in the inflation rate will tend to increase stock prices. d. There is no reason to believe that changes in interest rates will influence stock prices.
A firm that generates pollution is illustrated in Figure 9.7. If the government imposes a pollution tax equal to P3, the firm's abatement choice will be:
A. A1. B. A2. C. A3. D. less than A1.