Elasticity measures
A) the slope of a demand curve.
B) the inverse of the slope of a demand curve.
C) the percentage change in one variable in response to a one percent increase in another variable.
D) sensitivity of price to a change in quantity.
C
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The quantity theory of inflation indicates that the inflation rate equals
A) the growth rate of the money supply minus the growth rate of aggregate output. B) the level of the money supply minus the level of aggregate output. C) the growth rate of the money supply plus the growth rate of aggregate output. D) the level of the money supply plus the level of aggregate output.
Other things the same, a decrease in the real interest rate
a. decreases the quantity of loanable funds demanded. b. increases the quantity of loanable funds demand c. shifts the demand for loanable funds to the right. d. shifts the demand for loanable funds to the left.
Consider 45 risk-neutral bidders who are participating in a second-price, sealed-bid auction. It is commonly known that bidders have independent private values. Based on this information, we know the optimal bidding strategy for each bidder is to:
A. bid one penny above their own valuation to ensure they get the item. B. bid according to the following bid function: b = v ? (v ? L)/n. C. shade their bid to just below their own valuation. D. bid their own valuation of the item.
When aggregate planned expenditure exceeds real GDP, there is
A) a planned increase in inventories. B) a planned decrease in inventories. C) an unplanned decrease in inventories. D) an unplanned increase in inventories. E) an unplanned decrease in the price level.