Which of the following is true?
A. On a linear demand curve, elasticity is constant.
B. On a linear demand curve, the higher the price, the more elastic is demand.
C. At the same price, demand is more elastic on the steeper demand curve.
D. None are true.
Answer: B
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How does an increase in interest rates affect net exports?
What will be an ideal response?
Assume that Frantek Bass has an MPC equal to 0.80 . If he normally earns $50,000 per year, but is laid off for part of 2000 and only earns $30,000 . his saving for 2000 . according to Milton Friedman, will be
a. $24,000 b. $10,000 c. $6,000 d. –$6,000 e. –$10,000
Refer to the information provided in Figure 8.6 below to answer the question(s) that follow. 
Figure 8.6 Refer to Figure 8.6. Average variable cost is represented by
A. curve 1. B. curve 2. C. curve 3. D. line segment AB.
Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower