The value of cross price elasticity of demand between goods X and Y is 2.00?, while the cross price elasticity of demand between goods X and Z is negative 2.00. Which of the following are? true?
A. X and Y are complements and X and Z are substitutes.
B. X and Y and X and Z are substitutes.
C. X and Y are substitutes and X and Z are complements.
D. X and Y and X and Z are complements.
E. None of the above.
Answer: C. X and Y are substitutes and X and Z are complements.
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When he was chairman of the Fed, Paul Volcker faced an economy with significant stagflation which was a result of oil shocks. Volcker was determined to bring the inflation rate down, which essentially acted like a decrease in the inflation target
In this sense, Volcker's action caused ________ and caused inflation to decrease and ________. A) the AD curve to shift to the left; real GDP to increase. B) the AD curve to shift to the left; real GDP to decrease. C) the AS curve to shift to the right; real GDP to increase. D) the AS curve to shift to the right; real GDP to decrease.
The current deregulatory movement began to change laws to deregulation in the
a. early 1970s. b. late 1970s. c. early 1980s. d. early 1990s.
An increase in long-run average costs resulting from increases in output is
A) attributed to economies of scale. B) attributed to diseconomies to scale. C) attributed to constant returns to scale. D) attributed to the law of diminishing marginal product.
If, during a deposit expansion, not all money gets redeposited into the banking system and some leaks out as currency, then the real world multiplier is
A) not related to 1/RR. B) smaller than 1/RR. C) equal to 1/RR. D) larger than 1/RR.