Demand is said to be elastic when percentage changes in quantity demanded are
a. less than the percentage changes in price.
b. higher than the percentage changes in price.
c. equal to the percentage changes in price.
d. zero when price changes.
b
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Which of the following does NOT occur when the economy is operating at the equilibrium level of GDP?
A. Inventory investment equals zero. B. Planned investment equals actual investment. C. Real GDP tends to rise over time. D. Total planned expenditures equal real GDP.
Economists often refer to "good deals" as
A. efficient market outcomes. B. those with no opportunity cost. C. profit opportunities. D. break-even propositions.
The development of money as a medium of exchange has facilitated the expansion of trade because
A. holding money increases people's wealth. B. no other mediums of exchange are available. C. holding money increases people's income. D. money eliminates the "double coincidence of wants" problem.
A reduction in the discount rate
A. Increases the cost of borrowing reserves from the Federal Reserve. B. Discourages banks from borrowing reserves from the Fed. C. Is consistent with a tight monetary policy. D. Signals the Federal Reserve's desire for additional credit expansion.