Suppose computer prices at an office supply store fall from $1,000 to $900 and as a result the quantity demanded of typewriters decreases from 40 to 20 per month. The cross-price elasticity of demand is closest to
A. 6.3.
B. 5.0.
C. 0.16.
D. 0.2.
Answer: A
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In Macroland autonomous consumption equals 100, the marginal propensity to consume equals 0.75, net taxes are fixed at 40, investment is fixed at 50, government expenditures are fixed at 150, and net exports are fixed at 20. Aggregate expenditure equals
A. 290 + 0.25Y. B. 290 + 0.75Y. C. 320 + 0.75Y. D. 320 + 0.25Y.
The goal of the World Bank is to
A) sell the government securities of member nations on the open market. B) supervise exchange rate stability. C) help finance economic development. D) supervise the activities of the central banks of member nations.
When airplanes take off and land at Logan airport, residents of East Boston complain about the noise. The same planes make the same noise during the trip to Boston from Paris, but there are no ____ for most of the trip because ____
a. jet sounds; noise doesn't travel at high altitudes b. third parties; there are no externalities c. externalities; there are no third parties d. complaints; airplanes are insulated e. free riders; passengers must pay to board the plane
Before the Great Depression of the 1930s, most economists believed that
A. only active government policy could prevent recessions or inflation. B. a capitalist economy had a natural tendency to cure recessions or inflation. C. a capitalist economy had a natural tendency to inflation. D. recessions and depressions were inevitable until the economy broke down completely.