Which of the following indicates whether the good in question is normal or inferior?
a. cross-price elasticity of demand
b. income elasticity of demand
c. equilibrium elasticity of demand
d. unit-price elasticity of demand
b. income elasticity of demand
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In the monetary small open-economy model with a flexible exchange rate, an increase in the world real interest rate
A) increases domestic output and increases the nominal exchange rate, as long as real money demand is much more responsive to real income than to the real interest rate. B) increases domestic output and decreases the nominal exchange rate, as long as real money demand is much more responsive to real income than to the real interest rate. C) decreases domestic output and increases the nominal exchange rate, as long as real money demand is much more responsive to real income than to the real interest rate. D) decreases domestic output and decreases the nominal exchange rate, as long as real money demand is much more responsive to real income than to the real interest rate.
Which financial intermediary primarily exists to issue residential mortgages?
a. mutual funds b. insurance companies c. banks d. savings and loans
Which is the main difference between perfect competition and monopolistic competition?
(A) In perfect competition, the prices are set by the government. (B) In monopolistic competition, there are fewer sellers and more buyers. (C) In monopolistic competition, sellers can profit from the differences between their products and other products. (D) In perfect competition, the buyer is free to buy from any seller he or she chooses.
In periods of high inflation, real wages change even if nominal wages remain constant.
a. true b. false