The supply of a good will tend to be highly elastic if
A) additional resources to produce the good can be obtained quickly and with no increase in cost.
B) its price rises quickly and sharply when the demand increases.
C) the good has few close substitutes.
D) the good is generally classified as a luxury.
E) the good is generally classified as a necessity.
A
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In 2011, apples cost $1.49 a pound. Suppose the CPI was 120 in 2011 and 140 in 2012. If there is no change in the real price of an apple in 2012, what is the price of a pound of apples in 2012?
A) $2.74 B) $1.69 C) $1.66 D) $1.74 E) $1.28
The interest rate target emphasized in recent Federal Open Market Committee press releases is the
A) discount rate. B) prime rate. C) federal funds rate. D) equilibrium rate.
In addition to fiscal policy, the other main tool used to affect aggregate demand is
A. trade policy. B. industrial policy. C. planning policy. D. monetary policy.
Which is better for making comparisons over time, nominal GDP or real GDP, and why?
What will be an ideal response?