The demand for a good is inelastic with respect to price if the price elasticity of demand is:
A. less than one.
B. greater than one.
C. equal to one.
D. equal to negative one.
Answer: A
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When (if at all) can the crowding-out effect be prevented?
A) when the Fed decreases the money supply to accommodate the expansionary fiscal policy B) when the real money supply is held constant C) when the real balance effect is working D) when the Fed allows the real money supply to increase sufficiently to keep the interest rate from rising
Group price discrimination results in social welfare that ________ under a single-price monopoly
A) is greater than B) is lower than C) is the same as D) might be greater or might be lower than
With fixed exchange rates and capital mobility:
a. interest rates in the home country and in foreign countries are equalized. b. interest rates in the home country are higher. c. interest rates in foreign countries are higher. d. monetary policy maintains its autonomy.
Pure monopolists:
A. maximize MR. B. are price takers. C. confront demand curves that are perfectly inelastic. D. sell where P > MC.