If a 5 percent reduction in the price of a commodity results in a 3 percent increase in the quantity demanded, demand is said to be
a. perfectly elastic.
b. elastic.
c. unit elastic.
d. inelastic.
e. perfectly inelastic.
Answer: d. inelastic.
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For the CPI. the value of the index in the base year
A) always equals 100. B) depends upon price and quantity that are constantly changing. C) is always greater than 100. D) depends upon what prices did the year before.
The Economic Report of the President
a. discusses recent developments in the economy and presents analysis of current policy issues. b. is written by the Council of Economic Advisers. c. is the responsibility of the economists at the Office of Management and Budget. d. Both a and b are correct.
The smaller the mpc, the ________ the income-expenditure multiplier and the ________ the effect of a change in autonomous spending on short-run equilibrium output.
A. larger; larger B. smaller; larger C. larger; smaller D. smaller; smaller
The Fed has complete control over the money supply
Indicate whether the statement is true or false