If the Fed has a strong preference for stable prices relative to output, the ________ curve is relatively ________.
A. AD; steep
B. AS; steep
C. AD; flat
D. AS; flat
Answer: C
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The cross elasticity of demand for pizza with respect to the price of a soda is
A) positive because the goods are complements. B) negative because the goods are complements. C) positive because the goods are substitutes. D) negative because the goods are substitutes.
In the above figure, the marginal cost curve is curve
A) A. B) B. C) C. D) D.
Cartel agreements tend to break down
A) during economic downturns. B) because of price "chiseling" by one or more members. C) when there is overcapacity in the industry. D) All of the above
As the economy goes through an expansion,
a. fluctuations in GDP become more severe b. unemployment finally stabilizes c. investment stabilizes d. the classical model becomes a better predictor e. unemployment falls.