Which of the following statements is correct?
a. The demand for medicine is more elastic than the demand for sailboats.
b. The demand for iPads is more elastic than the demand for tablets in general.
c. The demand for cell phones is more elastic over a short period of time than over a long period of time.
d. All of the above are correct.
b
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At the beginning of a recession, the expenditure multiplier
A) offsets the initial cut in autonomous expenditure and slows the recession. B) has no effect on the recession. C) offsets the initial cut in autonomous expenditure and reverses the recession. D) reinforces the initial cut in autonomous expenditure and reverses the recession. E) reinforces the initial cut in autonomous expenditure and adds force to the recession.
When producers anticipate that the price of their product will increase in the future
A) the supply curve will shift to the right. B) the supply curve will shift to the left. C) the current production will move along on the supply curve. D) they will immediately lobby Congress to adjust prices now.
The short run is a period of time during which:
a. there is an expansionary gap that cannot be corrected using the passive approach. b. actual output equals potential output c. there is a recessionary gap that cannot be corrected through discretionary policy. d. resource buyers and sellers cannot adjust fully to changes in the price level. e. resource buyers and sellers can adjust fully to changes in the price level.
Describe the process in the money market by which the interest rate reaches its equilibrium value if it starts above equilibrium