A 10 percent increase in price leads to a 20 percent decrease in the quantity demanded. The price elasticity of demand is equal to
A) 0.5.
B) 1.0.
C) 2.0.
D) 20.0.
E) 10.0.
C
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When Exxon Mobil reports record profits of more than $10 billion per quarter, we know
A) other oil companies must be struggling. B) consumers must be paying high prices at the pump. C) consumers must have lost $10 billion in surplus. D) all of the above. E) none of the above follow from the information given.
Within the framework of the AD/AS model, if consumers and investors become more pessimistic about the future direction of the economy, this will lead to
a. an increase in aggregate demand. b. a decrease in aggregate demand. c. an increase in long-run aggregate supply (LRAS shifts to the right). d. a reduction in the natural rate of unemployment.
Most economists believe that money neutrality
a. does not hold in the short run. b. does not hold in the long run. c. does not hold in either the short run or long run. d. holds in the short run and the long run.
Which of the following countries has lower total government tax revenue as a percentage of GDP than the United States?
a. Canada b. Germany c. Sweden d. Mexico