The price elasticity of supply measures how:
A. easily labor and capital can be substituted for one another in the production process.
B. responsive the quantity supplied of X is to changes in the price of X.
C. responsive the quantity supplied of Y is to changes in the price of X.
D. responsive quantity supplied is to a change in incomes.
Answer: B
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When housing prices fall, as they did beginning in 2006 following the housing market bubble, consumption spending on furniture, appliances, and home improvements ________ as many households found it ________ to borrow against the value of their homes
. A) increased; easier B) declined; harder C) increased; harder D) declined; easier
Using the supply and demand model, what would happen if foreign investors no longer want to loan money to the United States?
a. Interest rates will decrease, and investment will decrease. b. Interest rates will increase, and investment will increase. c. Interest rates will increase, and investment will decrease. d. Interest rates will decrease, and investment will increase.
Assume that the expectation of a recession next year causes business investments and household consumption to fall, as well as the financing to support it. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and the nominal value of the domestic currency in the context of the
Three-Sector-Model? a. The quantity of real loanable funds per time period rises and nominal value of the domestic currency falls. b. The quantity of real loanable funds per time period falls and nominal value of the domestic currency remains the same. c. The quantity of real loanable funds per time period rises and nominal value of the domestic currency remains the same. d. The quantity of real loanable funds per time period falls and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.
Refer to the data provided in Table 10.3 below to answer the following question(s).
Table 10.3 
Refer to Table 10.3. If workers are paid $600 per day, then the firm is profit maximizing when it hires ________ workers.
A. two B. three C. four D. five