Which of the following describes a situation in which demand must be inelastic?
A. Total revenue decreases by 10 percent when the price of spats rises by 10 percent.
B. Total revenue decreases by less than 10 percent when the price of spats rises by 10 percent.
C. Total revenue increases by more than 10 percent when the price of spats rises by 10 percent.
D. Total revenue decreases by $10 when the price of spats rises by $10.
Answer: C
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A) higher marginal tax rates B) decrease in saving C) decrease in the marginal propensity to consume D) decrease in imports E) decrease in government purchases of goods and services
In monopolistic competition, each firm supplies a ________ part of the total market output and its actions ________ the actions of the other firms
A) small; do not directly affect B) small; directly affect C) large; do not directly affect D) large; directly affect
In the 1965 to 1973 period, U.S. policymakers ________
A) targeted an unemployment rate that, in hindsight, was likely too low B) pursued an easing of monetary policy designed to increase aggregate demand C) made some mistakes that led to the most sustained inflationary episode in U.S. history D) all of the above E) none of the above
If a government sells debt to help meet its expenditures, then the government has a
a. budget surplus. Other things the same, the surplus rises if government expenditures rise. b. budget surplus. Other things the same, the surplus rises if government expenditures fall. c. budget deficit. Other things the same, the deficit rises if government expenditures rise. d. budget deficit. Other things the same the deficit rises if government expenditures fall