Suppose a decrease in the supply of wheat results in an increase in revenue. This indicates that
A) the demand curve for wheat must be vertical.
B) the resulting increase in price is proportionately greater than decrease in quantity sold.
C) the decrease in quantity sold is proportionately larger than the resulting change in price.
D) the supply curve for wheat must be vertical.
B
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The wealth effect refers to
A) the impact of household real wealth on consumption, savings, and the IS curve. B) the impact of household real wealth on money, prices, and the LM curve. C) the impact of household real wealth on short term and long term interest rates. D) the impact of household real wealth on aggregate supply curve.
The price elasticity of demand measures the responsiveness of quantity demanded to changes in price
a. True b. False
The bond demand curve slopes downward because:
A. as bond prices fall bonds are less attractive. B. as bond prices fall so do yields. C. as bond prices rise yields increase. D. at lower prices the reward for holding the bond increases.
Cyclical unemployment is caused by
A. business cycle fluctuations. B. technological progress, which causes some industries to expand employment and others to reduce employment. C. reducing international trade barriers, which causes some industries to expand employment and others to reduce employment. D. people entering the labor force to search for jobs.