Suppose that an economy is initially producing at the full-employment level of output. Now suppose there is a reduction in the money supply. Other things being equal we can expect
A) demand-side inflation. B) supply-side inflation.
C) deflation. D) cost-pull inflation.
C
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Consider the following pairs of items:
a. shampoo and conditioner b. iPhones and earbuds c. a laptop computer and a desktop computer d. beef and pork e. air-travel and weed killer Which of the pairs listed will have a negative cross-price elasticity? A) a and b only B) c and d only C) e only D) a, b, and c only
Which one of the following is an example of a positive statement?
A) Farmers need some type of government aid. B) State governments should provide economic assistance to farmers. C) The federal government should provide economic assistance to farmers. D) The amount of financial assistance given to farmers is higher this year than it was 10 years ago.
The effect of a compensated price change is known as:
A. the price effect of a price change. B. the income effect of a price change. C. the substitution effect of a price change. D. the replacement effect of a price change.
Which of the following would decrease the cyclically adjusted deficit?
A) an increase in income B) a decrease in income C) an increase in the primary deficit D) a decrease in the primary deficit E) none of the above