Ceteris paribus, if more alternative forms of energy become available, we would expect the demand for gasoline to become:
A. more elastic.
B. more inelastic.
C. perfectly elastic.
D. perfectly inelastic.
Answer: A
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Which of the following is true of hyperinflation?
a. It causes the value of a currency to deteriorate so quickly that people become reluctant to hold that currency. b. It is a situation in which people hoard currency expecting its value to increase in recent future. c. It is a simultaneous increase in inflation and decrease in the quality of products. d. It occurred in the United States in the 1970s. e. It is a synonym for cost-push inflation.
If a country's budget deficit increases, then in the market for foreign-currency exchange,
a. the supply of its currency shifts right, so the exchange rate falls. b. the demand for its currency shifts right, so the exchange rate rises. c. the supply of its currency shifts left, so the exchange rate rises. d. the demand for its currency shifts left.so the exchange rate falls.
Explain the three growth-creating properties of innovation.
What will be an ideal response?
In the aftermath of the last financial crisis, critics of monetary policy argued that it was ineffective. The Federal Reserve had moved interest rates to historic lows without a significant stimulus effect. Some economists wondered if the United States was:
a) undergoing simultaneous increases in aggregate demand and supply. b) undergoing offsetting changes in aggregate demand and supply. c) facing hyperinflation. d) in a liquidity trap.