If not all prices adjust instantly to changing economic circumstances, an unexpected fall in the price level leaves some firms with higher-than-desired prices, and these higher-than-desired prices depress sales and induce firms to reduce the quantity of goods and services they produce
a. True
b. False
Indicate whether the statement is true or false
True
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In a budget line/indifference curve figure, how do you identify the best affordable combination of any two goods?
What will be an ideal response?
Everything else held constant, in the market for reserves, when the federal funds rate is 3%, lowering the discount rate from 5% to 4%
A) lowers the federal funds rate. B) raises the federal funds rate. C) has no effect on the federal funds rate. D) has an indeterminate effect on the federal funds rate.
For any given tax, the revenue generated is:
A. larger in markets with price-elastic demand and supply. B. the same regardless of price elasticity. C. always maximized in markets with price-elastic demand and supply. D. smaller in markets with price-elastic demand and supply.
From1980 –2007, government spending on all levels of education in constant dollars
a. increased by 1 percent per year b. increased by slightly more than 3 percent per year c. increased more than 10 fold d. fell by 5 percent e. fell by 5 percent per year