What happens when the Fed sells government bonds?
A) The money supply tends to rise.
B) The money supply tends to remain unchanged.
C) The money supply tends to fall.
D) The U.S. budget deficit necessarily rises.
C
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A correct formula (dropping all minus signs) for the calculation of the elasticity of demand between point Q1, P1 and point Q2, P2 is
A. [(P2? P1)/(P2 + P1)]/[(Q2? Q1)/(Q2 + Q1)]. B. [(P2? P1)/P1]/[(Q2? Q1)/Q1]. C. [(Q2? Q1)/(Q2 + Q1)]/[(P2? P1)/(P2 + P1)]. D. [(Q2? Q1)/Q2)]/[(P2? P1)/P2].
Refer to Figure 4-18. How much of the tax is paid by buyers?
A) $8 B) $5 C) $4 D) $3
If part of the labor force is unemployed, the foregone goods and services are
a. lost until the unemployed find jobs. b. are replaced by unemployment insurance. c. are lost forever. d. are replaced by an equal amount of imports.
A closed economy
a. does not engage in international trade of goods and services. b. does not engage in international borrowing or lending. c. both A and B d. engages in international borrowing and lending.