The transactions demand for money
A. varies inversely with nominal Gross Domestic Product (GDP).
B. varies directly with nominal Gross Domestic Product (GDP).
C. varies negatively with nominal Gross Domestic Product (GDP).
D. is unrelated to nominal Gross Domestic Product (GDP).
Answer: B
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Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
U.S. sugar trade agreements have fallen through. What will the likely effect be?
A. The demand for goods that use sugar will decrease. B. The demand for goods that use sugar will increase. C. The supply of goods that use sugar will increase. D. The supply of goods that use sugar will decrease.
An airline wants to introduce a charge for snacks on flights. Why would it not be such a good idea?
a. Passengers would be less likely to buy snacks b. Passengers would be more likely to carry their own snacks onboard c. Passengers would feel nickel-and-dimed and would switch airlines d. All of the above
If the price of a DVD decreases by 50 percent, the quantity demanded increases by 75 percent. The price elasticity of demand is:
A. -0.67 and is elastic. B. -0.67 and is inelastic. C. -1.5 and is inelastic. D. -1.5 and is elastic.