How does the concept of elasticity allow us to improve upon our understanding of supply and demand?
a. Elasticity allows us to analyze supply and demand with greater precision than would be the case in the absence of the elasticity concept.
b. Without elasticity, we would not be able to address the direction in which price is likely to move in response to a surplus.
c. Without elasticity, we would not be able to address the direction in which price is likely to move in response to a shortage.
d. Without elasticity, it is very difficult to assess the degree of competition within a market.
A
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The demand curve for bonds would be shifted to the left by an
A) increase in wealth. B) increase in expected returns on bonds. C) increase in expected inflation. D) increase in the liquidity of bonds relative to other assets.
Depreciation is
A. added to national income to get GDP. B. subtracted from national income to get GDP. C. added to GNP to get NNP. D. subtracted from GNP to get NNP.
An economy has government purchases of 1000. Desired national saving and desired investment are given by Sd = 200 + 5000r + 0.10Y - 0.20G Id = 1000 - 4000rWhen the full-employment level of output equals 5000, then the real interest rate that clears the goods market will be
A. 16.67%. B. 21.11%. C. 1.11%. D. 5.56%.
Compared to barter, money __________ transaction costs, making transactions __________ time-consuming
A) increases; more B) increases; less C) reduces; more D) reduces; less