Tax and spending policies affect aggregate demand only after some time elapses. Due to these time lags, fiscal policies end up getting based on
A. forecasts on the future state of the economy that are often inaccurate.
B. forecasts on the present state of the economy that are often inaccurate.
C. forecasts on the present state of the economy that are often accurate.
D. all of these.
Answer: A
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If a number greater than the mean of a series of observations is added to the series, the new mean is:
A) smaller than the original mean. B) greater than the original mean. C) same as the original mean. D) either greater or smaller than the original mean depending on the number of observations in the series.
A newspaper story on the effect of higher milk prices on the market for ice cream contained the following:
"As a result [of the increase in milk prices], retail prices for ice cream are up 4 percent from last year. . . . And ice cream consumption is down 3 percent." Source: John Curran, "Ice Cream, They Scream: Milk Fat Costs Drive Up Ice Cream Prices," Associated Press, July 23, 2001. Based on the information given, what is the price elasticity of demand for ice cream? A) 12% B) 0.75 (in absolute value) C) 1.33 (in absolute value) D) We do not have enough information to calculate the elasticity.
An asset-price bubble entails ________
A) increasing the value of one's assets to cover liability losses B) an increase in asset prices above their fundamental economic value C) reducing the number of participants in the underlying financial derivatives market D) an economic skins game
The concept of scarcity as used by economists refers to:
a. a situation of excess supply. b. a situation in which the available resources are not enough to satisfy the wants of the people at a zero price. c. a situation in which an item is available only in very small quantities. d. a situation in which an item is very expensive. e. a situation in which a resource is nonrenewable.