If substitutes for a good are readily available, the demand for that good
A) does not change substantially if the price rises.
B) does not change substantially if the price falls.
C) is inelastic.
D) is elastic.
E) Both answers A and B are correct.
D
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The liquidity trap ________.
A. makes contractionary monetary policy less effective B. makes expansionary monetary policy less effective C. makes expansionary fiscal policy less effective D. makes contractionary fiscal policy less effective
Which of the following accurately describes possible positions taken by hedgers?
A) may take a short position in the futures market to offset a long position in the spot market B) may take a short position in the spot market to offset a long position in the futures market C) may take a long position in the spot market to offset a short position in the futures market D) may take a long position in the futures market to offset a long position in the spot market
Consider the labor market for short-order cooks. A labor-augmenting technological change such as a faster food processor will cause
a. both equilibrium wages and equilibrium employment to increase. b. both equilibrium wages and equilibrium employment to decrease. c. equilibrium wages to increase and equilibrium employment to decrease. d. equilibrium wages to decrease and equilibrium employment to increase.
Why must a good economic theory use abstraction?
a. It makes theories more complicated and thus more accurate. b. It summarizes, thereby making theories easy for lay people to understand. c. The world is too complex to analyze without it. d. Economics is too unpredictable to analyze without it.