Which of the following is true?
i. The supply of a good is inelastic if when its price changes, the percentage change in the quantity supplied exceeds the percentage change in price.
ii. Price elasticity of supply equals the percentage change in the quantity supplied divided by the percentage change in price.
iii. If demand is price elastic, a rise in price leads to a decrease in total revenue.
A) only i
B) only ii
C) only iii
D) i and ii
E) ii and iii
E
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A lower level of income causes the demand for money to ________ and the interest rate to ________, everything else held constant
A) decrease; decrease B) decrease; increase C) increase; decrease D) increase; increase
How does a competitive firm's demand for labor react to a specific tax on each unit of output it sells?
What will be an ideal response?
Equilibrium GDP in excess of potential GDP eventually will cause the aggregate
a. demand curve to shift outward. b. supply curve to shift outward. c. supply curve to shift inward. d. demand curve to become flatter.
If the marginal propensity to save is 0.3, the marginal propensity to import is 0.1, and the government increases expenditures by $10 billion, ignoring foreign-income repercussions, how much will gross domestic product (GDP) rise?
A. $10 billion. B. $15 billion. C. $20 billion. D. $25 billion.