If the income elasticity of demand (YED) for a good is 0.9, then the good is:
(a) An Inferior good;
(b) A Normal good;
(c) A Luxury or Superior good;
(d) The above information is incomplete and therefore no judgement is possible.
Ans: (b) A Normal good;
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If the quantity supplied of euro were greater than the quantity demanded, then the price of the
a. euro would rise. b. euro would fall. c. dollar would fall. d. euro would be in equilibrium.
What is consumer surplus? How is it measured?
What will be an ideal response?
Due to macroeconomics interdependence between large countries, the effect of a permanent monetary policy expansion by Home is as follows: Home output
A) rises, Home's currency depreciates, and Foreign output may rise or fall. B) falls, Home's currency depreciates, and Foreign output may rise or fall. C) rises, Home's currency appreciates, and Foreign output may rise or fall. D) rises, Home's currency depreciates, and Foreign output rises. E) falls, Home's currency appreciates, and Foreign output may rise or fall.
Capital goods
A) are a special type of consumption goods. B) are consumed because they enhance the enjoyment consumers obtain from other goods and services. C) are goods used to make consumer goods and services. D) lead to inward shifts of a production possibilities curve.