Suppose A and B are complementary goods. Other things being equal, the demand curve for A will shift to the right when the price of B goes down
a. True
b. False
Indicate whether the statement is true or false
True
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
The economy is at the equilibrium shown at point a in the above figure. If the Fed
A) sells government securities, the economy moves to an equilibrium at point b. B) buys government securities, the economy moves to an equilibrium at point c. C) sells government securities, the economy moves to an equilibrium at point c. D) buys government securities, the economy moves to an equilibrium at point b. E) None of the above is correct because the economy will remain at point a if the Fed buys or if the Fed sells government securities.
Funds flow from lenders to borrowers
A) indirectly through financial markets. B) directly through financial intermediaries. C) indirectly through financial intermediaries. D) primarily through government agencies.
In the above table, the cross price elasticity of demand (using averages) for Z with good X, when PX increases from $12 to $15, is approximately equal to
A) +1.03 B) +2.26. C) +0.44. D) -0.44.