If a $100 drop in the price of a $10,000 car resulted in an increase in the quantity of cars purchased from 100 to 110 and a $100 drop in the price of a $1,000 vacation rental resulted in an increase in the quantity of weekly vacation homes rented from 100 to 110, the price elasticity of demand is:
A. the same for both the car and the vacation rental.
B. not comparable.
C. less for the car.
D. greater for the car.
Answer: D
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The prospect of future deficits
A) would prompt government to vastly expand discretionary spending. B) limits the ability of government to conduct fiscal policy in the near future. C) requires a government to eliminate all entitlement spending. D) encourages government to conduct expansionary fiscal policy.
An economy in which output has decreased and prices have decreased would suggest a:
A. decrease in aggregate demand. B. increase in aggregate demand. C. decrease in short-run aggregate supply. D. increase in short-run aggregate supply.
Trade creation allows consumers access to more goods at a lower price than would have been possible without integration.
a. true b. false
Explain why a nation is a borrower if its current account is in deficit at a given point in time.
What will be an ideal response?