The supply of product X is inelastic (but not perfectly inelastic) if
A. an 8% increase in price generates an 8% increase in quantity supplied.
B. a 10% decrease in price does not affect quantity supplied.
C. a 7% decrease in price generates a 5% decrease in quantity supplied.
D. a 5% increase in price generates a 7% increase in quantity supplied.
Answer: C
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The nominal interest rate equals:
a. the real interest rate minus the inflation rate. b. the inflation rate minus the real interest rate. c. the real interest rate plus the inflation rate. d. none of the above.
Sequential exogeneity is implied by dynamic completeness.
Answer the following statement true (T) or false (F)
The economic impact of a change in spending, working through the multiplier, takes effect
A. immediately. B. very quickly, with a small number of rounds of spending. C. after a very long period of time. D. after multiple rounds of spending occur.
Refer to the information provided in Figure 1.5 below to answer the question(s) that follow.
Figure 1.5Refer to Figure 1.5. In many industries, as firms produce additional units, average costs of production decline as the firm produces an additional unit, but average costs declines by a smaller and smaller amount as production continues to increase. If output is graphed on the horizontal axis and average costs are graphed on the vertical axis, the relationship between average costs and output would be like which of the following Panels?
A. A B. B C. C D. D