______________—a term referring to when a given percent price change in price leads to an equal percentage change in quantity demanded or supplied.
a. Infinite elasticity
b. Zero inelasticity
c. Constant unitary elasticity
d. Perfect elasticity
c. Constant unitary elasticity
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To compensate for the possibility of indirect crowding out, a government engaging in expansionary policy aimed at eliminating a recessionary gap could
A) reduce taxes rather than increase government spending. B) increase spending less than the simplest Keynesian model would predict. C) both reduce taxes and reduce spending to be able to achieve full employment. D) increase spending more than the simplest Keynesian model would predict.
The rutabaga market is perfectly competitive and the price of a ton of rutabagas rises. As a result, Rudy, a rutabaga farmer, will
A) decrease his output of rutabagas. B) not change his output of rutabagas because Rudy's firm is a price taker. C) increase his output of rutabagas. D) at first decrease and then increase his output of rutabagas. E) probably change his output of rutabagas, but more information is needed about the change in the marginal revenue of a ton of rutabagas.
To construct a graph that would enable us to find equilibrium GDP, we would need to plot
a. the consumption-income line b. a line showing the sum of consumption and investment at each income level c. the investment spending line d. the consumption-income line and the government expenditures line e. an aggregate expenditure line and the 45-degree line from the origin
Objections to free trade
a. arise because trade harms everyone b. arise when some groups within a nation are harmed by trade c. arise because importers and exporters are often the same people d. are inconsistent with economic rationality e. arise because people prefer not to consume foreign-produced goods