What determines prices and inflation in the long-run classical model?
A. money supply
B. aggregate demand and supply
C. interest rates
D. saving and investment
Ans: A. money supply
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The income elasticity of demand is the percentage change in the ________ divided by the percentage change in ________
A) quantity demanded; the price of a substitute or complement B) quantity supplied; price C) quantity demanded; price D) quantity demanded; income E) quantity demanded when income changes; the quantity supplied
When price falls in a perfectly competitive industry, each firm will
a. sell more output b. sell the same amount of output but earn less economic profit c. sell less output d. raise its price e. shut down production until price regains its former level
The current account is
A. an accounting statement that includes all spending flows across a nation's border, including the purchase of assets. B. an accounting statement that includes all spending flows across a nation's border for the purchase of goods and services. C. equal to value of a country's exports. D. equal to value of a country's imports.
Which is an example of the government command approach?
A. Fast-food franchise growth B. Public schools C. Private college education D. The growth of community banks