The goal of contractionary monetary policy is to:
A. increase interest rates to slow down the economy.
B. increase interest rates to stimulate the economy.
C. reduce interest rates to slow down the economy.
D. reduce interest rates to stimulate the economy.
Answer: A
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Demand for a product tends to be more elastic the longer the time period considered because
A) sellers have more time to expand production. B) buyers have more time to search for substitutes. C) price increases over time make the price larger relative to buyers' incomes. D) the inverse relationship between the price and the quantity demanded weakens over time. E) buyers get used to the new price.
During the financial crisis of 2007-2009, the deposit expansion multiplier plummeted to a fraction of its normal value. Why?
What will be an ideal response?
The recent growth records of Japan and Hong Kong during the last fifty years indicate that a nation can grow rapidly without which of the following?
What will be an ideal response?
Which of the following comparisons is true regarding price elasticity of demand?
A. The demand for monthly car payments is less elastic than the demand for a monthly gym membership because the car payments require a greater share of the consumer's income. B. The demand for gasoline a year after a price change is less elastic than the demand for gasoline a week after a price change because consumers have had time to adjust. C. The demand for water is less elastic than the demand for diamonds because water is a necessity but diamonds are a luxury. D. The demand for cough syrup is less elastic than the demand for insulin because there are no close substitutes for insulin.