If the income elasticity of a good is greater than zero, we say that the good is a:
A. normal good.
B. inferior good.
C. complementary good.
D. substitute good.
Answer: A
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In the foreign exchange market, an increase in the supply of dollars could be the result of
A) an increase in the expected future exchange rate. B) a decrease in the U.S. interest rate differential. C) a decrease in the exchange rate. D) an increase in the exchange rate. E) an increase in the U.S. interest rate differential.
If you took a course on the economics of growth, what elements would you expect to be missing that you would need to discuss economic development?
What will be an ideal response?
The New Keynesian transmission mechanism for monetary policy is characterized by
A) helicopter drops of money. B) money having an impact on the real interest rate. C) banks using money injections for business loans. D) the government buying goods with fresh money.
The ability of a monopoly to charge a price that exceeds marginal cost depends on
A) the price elasticity of supply. B) price elasticity of demand. C) slope of the demand curve. D) shape of the marginal cost curve.