If the cross-price elasticity of demand between shrimp and oysters is 4, then a 2% decrease in the price of shrimp will result in a(n) ________ in the quantity of oysters demanded.
A. 4% decrease
B. 0.5% decrease
C. 2% increase
D. 8% decrease
Answer: D
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Suppose the U.S. public holds $1 trillion in government bonds, all with an 8 percent nominal interest rate
If the Federal Reserve can hold that nominal rate constant, what inflation rate would make the government's net interest expense exactly zero? A) 16 percent B) 8 percent C) 0 percent D) -8 percent
Keynesians argue that changes in wages will lag price level changes even if expectations are formed rationally because
A) workers have very little bargaining power compared with that of management. B) only a small percentage of workers are unionized. C) wages are often set by long-term contracts. D) workers often have incorrect information.
What method is often used when both parties want to eliminate information asymmetry?
A. Statistical discrimination. B. Signaling. C. Moral hazard. D. Screening.
Which of the following is not a durable good?
A) furniture B) automobile C) clothing D) refrigerator