Knowing the value of the cross elasticity of demand allows us to distinguish between inferior goods and normal goods.
Answer the following statement true (T) or false (F)
False
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A decrease in interest rates caused by a change in the price level would cause a(n) ________.
A. increase (or shift right) in aggregate demand B. decrease in the quantity of real output demanded (or movement up along AD) C. increase in the quantity of real output demanded (or movement down along AD) D. decrease (or shift left) in aggregate demand
Which one of the following is an example of discretionary fiscal policy used to correct an inflationary gap?
A) an increase in government expenditures approved by Congress B) decrease in the money supply by the Federal Reserve C) a tax increase passed into law by Congress D) an agreement among major banks to lower interest rates
Which of the following is most likely to be observed in a community where legal ceilings are imposed on residential rents?
A) Landlords will do a better job of property maintenance. B) People moving into the community will have difficulty locating residential space to rent. C) Poor people will be able to find adequate housing. D) Tenants will reduce their use of housing space. E) The people most in need of housing will be able to obtain the space they want.
Refer to the table above. If the market for notebooks is perfectly competitive, the equilibrium quantity is:
A) 2 units. B) 3 units. C) 4 units. D) 5 units.