If a good's price increases by 2 percent, then its quantity supplied increases by more than 2 percent. This means
A. supply is inelastic.
B. supply is elastic.
C. supply is unit-elastic.
D. the good has good substitutes.
Answer: B
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What will be an ideal response?
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a. True b. False Indicate whether the statement is true or false
During the financial crisis it was proposed that firms be provided with a tax credit for investment projects. Such a tax credit would
a. raise both the interest rate and the real exchange rate. b. raise the interest rate and reduce the real exchange rate. c. reduce the interest rate and raise the real exchange rate. d. reduce both the interest rate and the real exchange rate.
Which of the following is a flow in the circular flow model?
A) the flow of goods and services from households to firms B) the flow of profit and the flow of revenue C) the flow of income earned by firms and the flow of expenditures earned by households D) the flow of revenue received by firms and the flow of payments to resource owners