If a 1 percent decrease in the price of product A brings about a 3 percent increase in the sales of product B, then:
A. products A and B are complementary.
B. the cross elasticity of demand between these two products is positive.
C. products A and B are substitutes.
D. the demand for these products is inelastic.
Answer: A
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If spending increased by $200, and the GDP increased $1,000 as a result, the MPC must be:
A. 0.80 B. 0.75 C. 5 D. 4
Refer to the graphs below. Assume that the economy is initially at equilibrium where AD2 and AS intersect in Graph 1, and also assume that the economy is initially at point C in Graph 2. A movement from point C to point B in graph 2 would most likely be associated, in graph 1, with a shift of:
A. AD to the right
B. AD to the left
C. AS to the right
D. AS to the left
The second-largest cash transfer program(s) in the United States, smaller than only the Social Security system, is(are) the
A. Supplemental Nutrition Assistance (SNAP) program. B. Medicare and Medicaid programs. C. unemployment insurance program. D. Temporary Assistance to Needy Families (TANF) program.
An increase in the general level of prices will tend to cause, other things the same ________
A) an increase in the real value of assets B) an increase in the real value of liabilities C) no change in the real value of liabilities D) a decrease in the real value of liabilities