The price elasticity of demand for furniture is estimated at 1.3. This value means a one percent increase in the
A) price of furniture will increase the quantity of furniture demanded by 1.3 percent.
B) price of furniture will decrease the quantity of furniture demanded by 1.3 percent.
C) quantity of furniture demanded will decrease the price of furniture by 1.3 percent.
D) quantity of furniture demanded will increase the price of furniture by 1.3 percent.
B
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If you compare the balance of payments accounts of Japan, China, Pakistan, and Romania, you may be surprised to see that they all
a. have the same exchange rates b. have current accounts that add up to zero c. have current accounts that add up to one d. add up to zero e. are recorded in U.S. dollars
In the United States in 2015, consumption represented slightly less than
a. 60 percent of GDP. b. 70 percent of GDP. c. 80 percent of GDP. d. 90 percent of GDP.
Which of the following is NOT a role of Adam Smith?
A. wrote Wealth of Nations book in 1776 B. believes that prices, self interest, and competition have a role in the economy C. believes in the efficiency of market economies D. argued for laissez faire E. focused on an accumulation of gold
The Lucas supply function, in combination with the assumption that expectations are rational, implies that an announced monetary policy change will
A. not change output. B. increase output, but never decrease output. C. decrease output, but never increase output. D. either increase or decrease output, depending on the type of monetary policy change.