Two assumptions made in Gordon's early presentation of the IS-LM model were that the Federal Reserve has ________ control of the money supply and that the money demand function ________ subject to instability
A) precise, is
B) precise, is not
C) imprecise, is
D) imprecise, is not
B
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If the demand for a good is relatively elastic, this means that consumer purchases of the good are
a. not very sensitive to the price of the good. b. highly sensitive to the price of the good. c. unrelated to the price of the good. d. unaffected by changes in the income level of consumers.
Inelastic supply
What will be an ideal response?
A recession would be a decline in real GDP for at least
A. one business quarter. B. two business quarters. C. one business year. D. two business years.
The opportunity cost of capital is
A. the rate of return that could be earned by the owner's capital were it used elsewhere. B. the rate of interest the government uses to calculate legal business tax penalties. C. the rate of return realized on an investment. D. the rate used to calculate a firm's tax liability.