When the price of a good increases by 300%, the quantity supplied of the good increases from 200 units to 900 units. The price elasticity of supply of the good is:
A) 1.17.
B) 1.5.
C) 3.
D) 4.5.
A
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If the Fed fears inflation, then the Fed
A) directs banks to raise the nominal interest rate. B) will increase the income tax rate on interest income. C) directs banks to lower the nominal interest rate. D) will sell government securities in the open market. E) will buy government securities in the open market.
When a business is set up as a sole proprietorship, the owner of the business faces limited liability
Indicate whether the statement is true or false
An increase in taxes will cause the consumption schedule to
A. shift upward. B. shift downward. C. remain fixed as the economy moves upward along the schedule. D. remain fixed as the economy moves downward along the schedule.
The real balances effect says that an increase in the price level
A. Reduces the real value of a fixed amount of savings, consequently reducing the quantity of goods and services purchased. B. Increases the price of U.S. produced goods, causing foreign consumers to buy fewer U.S. goods. C. Increases the need to borrow, which drives up interest rates and reduces loan-financed purchases. D. Increases the price of U.S. produced goods, causing Americans to buy more imported goods.