For a particular good, a 2 percent increase in price causes a 12 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
a. There are no close substitutes for this good.
b. The good is a luxury.
c. The market for the good is broadly defined.
d. The relevant time horizon is short.
b
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Stability and equity are two principles associated with
a. private goods as opposed to public goods b. public goods, such as public assistance and defense c. merit goods, such as public assistance and agriculture d. transfer payment programs, such as education and natural resources e. transfer payment programs, such as public assistance and agriculture
A relative price is:
A. the price of a specific good in comparison to the prices of other goods and services. B. the percentage change in a price index such as the CPI. C. the rate of inflation. D. a measure of overall prices at a particular point in time.
An economy where there is a wide gap between the compensation of the top workers in certain fields and that of the merely competent workers is called a(n)
A. inequality economy. B. hyperinflation economy. C. superstar economy. D. competitive economy.
Which of the following would most likely NOT be included in the liquidity approach to defining the money supply?
A. money market mutual fund accounts B. traveler's checks C. government bonds D. savings deposits