The set of mechanisms and institutions that resolve the questions of what, how, and for whom goods are produced is called the _____
a) automatic stabilizer mechanism.
b) business resolution device.
c) circular flow model.
d) multiplier mechanism.
e) economic system.
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If the absolute price elasticity of demand for a product is less than 1, then
A) the absolute price elasticity of demand is inelastic and consumers are relatively insensitive to price changes. B) the absolute price elasticity of demand is inelastic and consumers are relatively sensitive to price changes. C) the absolute price elasticity of demand is elastic and consumers are relatively insensitive to price changes. D) the absolute price elasticity of demand is elastic and consumers are relatively sensitive to price changes.
If city officials expect that an increase in bus fares will raise mass transit revenues, they must think that the demand for bus travel is
a. elastic b. unit elastic c. inelastic d. perfectly inelastic e. -10
A theory is an untested assertion of alleged fact.
Answer the following statement true (T) or false (F)
Suppose in some country that the first $5,000 of interest income is exempt from income tax. If the government then removed this exemption
a. the interest rate and investment would rise. b. the interest rate would rise and investment would fall. c. the interest rate would fall and investment would rise. d. the interest rate and investment would fall.