If a 5 percent decrease in the price of a good produces a 5 percent increase in the quantity demanded, the price elasticity of demand is:
A. perfectly elastic.
B. unitary elastic.
C. elastic.
D. inelastic.
Answer: B
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One of the potential upsides of contractionary fiscal policy is a reduction in
A. tax revenues. B. unemployment. C. output. D. payments on the national debt.
The law of supply and the law of demand both rely on the concept of opportunity cost.
Answer the following statement true (T) or false (F)
An example of a factor of production is
A) a car produced by an auto manufacturer. B) a worker hired by an auto manufacturer. C) a loan granted to an auto manufacturer. D) the automobiles exported by an auto manufacturer.
Near-monies:
A. include all financial and real assets that can be easily converted into currency. B. are certain highly liquid financial assets that do not function directly as a medium of exchange but can be readily converted into M1. C. are excluded from M2 because they are highly liquid. D. are defined as monetary balances that are immediately available, at zero cost, for household and business transactions.