If the income elasticity of demand for spaghetti is -1.3, then spaghetti
A) is a normal good.
B) is an inferior good.
C) has an elastic demand.
D) is income elastic.
B
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Imperfect information is a critical assumption in the
a. classical model. b. Keynesian model. c. monetarist model. d. new Keynesian model. e. real business cycle model.
If the cross-elasticity of demand for bacon with respect to price of beefsteak is positive, then:
a. an increase in the price of beefsteak will shift the demand curve for bacon outward. b. a decrease in the price of beefsteak will shift the demand curve for beefsteak outward. c. an increase in the price of bacon will shift the demand curve for beefsteak inward. d. a decrease in the price of bacon will shift the demand curve for beefsteak outward.
The Keynesian cause-and-effect sequence predicts that an increase in the money supply will cause interest rates to:
A. fall, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP. B. fall, cutting investment and shifting the AD curve leftward, leading to a decrease in real GDP. C. rise, cutting investment and shifting the AD curve rightward, leading to an increase in real GDP. D. rise, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP.
If the exchange rate between the United States and Portugal changes from $1 = 1 euro to $1 = 2 euros, then holding everything else constant, the price of U.S. goods in Portugal will decrease.
Answer the following statement true (T) or false (F)