One of the three reasons as to why the oversimplified multiplier formula overstates the multiplier is that it ignores price-level changes, which reduce the multiplier.
Answer the following statement true (T) or false (F)
True
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The value of zero is used to distinguish between elastic and inelastic price elasticity of demand for a product; so, if the elasticity is greater than zero, it is elastic and if it is less than zero, then it is inelastic.
Answer the following statement true (T) or false (F)
What is typically not considered a characteristic of a central bank?
a. The bank backs its currency with gold or silver. b. The bank has considerable control over the stock of money and uses this control to moderate fluctuations in credit conditions and prices. c. The bank regulates other banks. d. The bank lends a lot of money to the government. e. The bank serves as a lender of last resort to other banks by lending them money when no one else will.
A restaurant hires cooks and waiters. Cooks earn $10 an hour; waiters earn $5 an hour. The manager, who wants to maximize the number of meals served given a fixed payroll of $45 per hour, expects the following from cooks and waiters: 
Given the above information, and given the fixed payroll, the maximum number of meals that can be served is
A. 670. B. 850. C. 1,130. D. 240. E. none of the above
Small differences in annual growth rates of real GDP generate large differences in real GDP over time because of the:
A. diminishing returns to capital. B. importance of average labor productivity. C. limits of economic growth. D. power of compound interest.