In the long run, price elasticities of demand are usually
A. greater than they are in the short run because consumers have time to adjust.
B. the same as they are in the short run because tastes don't change.
C. less than they are in the short run because prices rise over time.
D. less than they are in the short run because real prices fall over time.
Answer: A
You might also like to view...
The word "final" in the definition of GDP refers to
A) not counting intermediate goods or services. B) the time period when production took place. C) valuing production at market prices. D) counting the intermediate goods and services used to produce GDP.
Most economists believe that the CPI
a. accurately measures the inflation rate b. accurately measures the inflation rate except during years when there are major economic shocks like the Arab oil embargo c. slightly underestimates the inflation rate d. seriously underestimates the inflation rate e. overstates the inflation rate
What would lead an economist to conclude that Theory A is superior to Theory B?
A) Theory A predicts real-world events better than does Theory B. B) The assumptions underlying Theory A are more realistic than are the assumptions underlying Theory B. C) Theory A explains how people think, whereas Theory B only explains what they do. D) Theory A is based on the assumption that an individual typically cannot determine what is in his or her own best interest, whereas Theory B assumes that each person knows what is in his or her own best interest and acts accordingly.
In the long run, the chief determinant of exchange rate changes is a change in
A. interest rates. B. real GDP. C. the price of gold. D. price levels.