The demand for a pack of gum is ______________ than is the demand for a steak because _______________.
A. less price elastic; a pack of gum requires a smaller portion of one's income.
B. more price elastic; a pack of gum requires a smaller portion of one's income.
C. less price elastic; a pack of gum is more of a luxury.
D. more price elastic; a pack of gum is more of a luxury.
A. less price elastic; a pack of gum requires a smaller portion of one's income.
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A movement from point N to point L would represent
A. an increase in both consumer goods and capital goods.
B. a decrease in both consumer goods and capital goods.
C. an increase in consumer goods, but a decrease in capital goods.
D. an increase in capital goods, but a decrease in consumer goods.
If the U.S. capital and financial account balance has a $30 million surplus and there was no change in official reserves during that year, we know that
A) the United States has a $30 million current account deficit. B) U.S. official reserves have increased by $30 million. C) the United States is a net lender. D) U.S. net foreign lending must equal $30 million. E) the United States has a $30 million current account surplus.
The long-run opportunity cost of government spending crowding out private investment: a. equals about 10 percent of GDP
b. lowers interest rates and results in lower interest income for U.S. resource owners. c. would be greater if the government's expenditures were invested in building better highways and a more educated workforce. d. results from the corresponding contractionary gap. e. would be greater if the government's expenditures were devoted to increasing retirement benefits rather than to educating the work force.
Fiscal policy affects
A. Interest rates only, and therefore does not affect the level or mix of output. B. Both the level and the mix of output. C. The level of output only. D. The mix of output only.