Goods whose income elasticity of demand is greater than zero are _____
a. inferior goods
b. normal goods
c. substitute goods
d. superior goods
e. public goods
b
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If velocity does not change and if real GDP and the quantity of money grow at the same rate, then the price level
A) does not change and the inflation rate is zero. B) falls and the inflation rate is negative. C) rises and the inflation rate is negative. D) falls and the inflation rate is positive. E) rises and the inflation rate is positive.
As job opportunities for women and the wages those jobs pay have increased, the opportunity cost of doing housework has ________, so many families have chosen to hire specialists in households chores, such as cleaning services and lawn care services
, because the cost of these specialists is ________ than the cost of the wife (or husband) performing those chores. A) decreased; lower B) increased; higher C) decreased; higher D) increased; lower
Banks try to keep their level of excess reserves low because
a. the Fed charges a penalty for holdings of excess reserves. b. they are concerned that the money multiplier will become too large. c. they wish to maximize profits. d. bank regulators levy fines on the amount of excess reserves.
Table 5.2Refer to Table 5.2. A change in the price of calculators caused the change in quantity demanded shown in the table. The price elasticity of demand for calculators (calculated using the initial-value formula) is:
A. 25. B. 1.75. C. 0.75. D. 0.25.