The cross price elasticity for low mpg (miles per gallon; gas mileage) cars for a change in the price of gasoline is likely to be
A. zero.
B. negative.
C. positive and greater than 1.
D. positive and less than 1.
Answer: B
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Capital outflows occur if:
A) domestic interest rates are higher than foreign interest rates. B) domestic interest rates are lower than foreign interest rates. C) domestic and foreign interest rates are the same. D) none of the above.
If people start to use cash because of an increase in credit card fraud, which of the following would we expect to happen under a neutralization policy?
a. The money supply would decrease, real GDP would not change, and the interest rate would not change. b. The money supply would increase, real GDP would not change, and the interest rate would not change. c. The money supply would decrease, real GDP would increase, and the interest rate would decrease. d. The money supply would increase, real GDP would not change, and the interest rate would decrease. e. The money supply would decrease, real GDP would decrease, and the interest rate would not change.
Suppose Iceland goes from being an isolated country to being an importer of coats. As a result,
a. consumer surplus increases for consumers of coats in Iceland. b. producer surplus increases for producers of coats in Iceland. c. total surplus remains unchanged in the coat market in Iceland. d. it is reasonable to infer that Iceland has a comparative advantage over other countries in coat production.
An industry consists of three firms with equal annual sales. What is the industry's C4?
A. 0.75 B. 1.00 C. 0.58 D. There is not sufficient information to compute the industry C4.