Suppose the Pleasant Corporation cuts the price of its American Girl dolls by 10 percent, and as a result, the quantity of the dolls sold increases by 25 percent. This indicates that the price elasticity of demand for the dolls over this range is:
a. 2.5.
b. 0.4.
c. 0.5.
d. 5.0.
a
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Suppose the economy currently has some underutilized resources. The Fed engages in expansionary monetary policy. The impact of expansionary monetary policy will be to
A) increase aggregate demand, increase prices and increase real GDP. B) increase short-run aggregate supply, decrease in prices and decrease in real GDP. C) increase short-run aggregate supply, decrease prices and increase real GDP. D) increase aggregate demand, increase prices and decrease real GDP.
The above figures show the market for HD televisions. If there are severe earthquakes that destroy a significant number of HD television manufacturing plants, which figure shows the effect of the earthquake?
A) Figure A B) Figure B C) Figure C D) Figure D E) None of the figures represent this change.
If U.S. net exports are $100 billion and the U.S. purchased $250 billion in foreign assets, then what amount of U.S. assets did foreigners purchase?
a. $150 billion b. -$100 billion c. $250 billion d. -$150 billion e. $50 billion
The smaller is the marginal propensity to consume (MPC)
A. the smaller is the slope of the saving function. B. the larger is the slope of the consumption function. C. the smaller is the multiplier. D. the larger is the multiplier.