Which of the following explains why a $100 billion reduction in consumption spending might decrease equilibrium real GDP by more than $100 billion?
A. Say's law.
B. The quantity theory of money.
C. Flexible resource prices.
D. The multiplier principle.
Answer: D
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If demand increases and supply decreases, what is the effect on equilibrium price and equilibrium quantity?
A) The price falls and the quantity might increase, decrease, or remain the same. B) The price rises and the quantity might increase, decrease or remain the same. C) The quantity decreases and the price might rise, fall, or remain the same. D) The quantity increases and the price might rise, fall, or remain the same.
Necessities tend to have more inelastic demands than luxuries
Indicate whether the statement is true or false
Who owns the Fed?
a. the federal government b. the 50 state governments c. the District Federal Reserve Banks d. it has no ownership, which is why it is called independent e. member banks
A scarce resource
A. is always very expensive. B. is hard to find. C. is not something managers need to worry about. D. has multiple uses.