Which of the following statements is correct?
A) Supply is more elastic in the short run than in long run.
B) Supply is more elastic in the long run than in short run.
C) Price elasticity of supply is constant along the supply curve.
D) Price elasticity of supply is always a negative number.
Answer: B
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When an externality is present in a market, and correcting it increases the efficiency of the market, we can conclude it is a:
A. negative externality. B. positive externality. C. network externality. D. either a negative or a positive externality.
Liquidity is:
A. a measure of how easily a particular asset can be converted quickly to cash without much loss of value. B. the speed with which dollars are spent in the economy. C. the speed with which physical dollars change hands in the economy. D. the magnitude of change in the money supply as controlled by the Fed.
According to the equation of exchange, if total output and velocity are constant, a 20 percent increase in the money supply leads to
a. a 20 percent decrease in the price level. b. less than a 20 percent decrease in the price level. c. less than a 20 percent increase in the price level. d. a 20 percent increase in price level.
Which of the following statements is correct?
A) The Social Security program funnels transfers from retired individuals to the youngest children of low-income families. B) Social Security is an entitlement which is available to everyone, including those who have not contributed to the fund during their active work years. C) Social Security benefits are received by people who had contributed to the fund during their active work years. D) As a public transfer payment, Social Security benefit is available only to the poor.