Ceteris paribus, in a closed economy, if consumers become more optimistic ________
A) autonomous consumption would decrease
B) the equilibrium interest rate should increase
C) saving should increase
D) all of the above
E) none of the above
B
You might also like to view...
When Airbnb customers in Malibu start paying hotel taxes, this will have the potential to ________ the equilibrium price in this market and, therefore, ________ efficiency
A) raise; increase B) raise; decrease C) lower; decrease D) lower; increase
Reducing transfer payments is an appropriate way to counteract a recessionary gap
a. True b. False Indicate whether the statement is true or false
Answer the following statement true (T) or false (F)
1) If the coefficient of cross elasticity of demand is positive, the two products are complementary goods. 2) An income elasticity coefficient of -1.8 means the product is a normal good. 3) A cross elasticity of demand coefficient of +2.5 indicates that the two products are substitutes. 4) We would expect the coefficient of cross elasticity of demand for DVD players and DVDs to be positive.
The price elasticity of demand measures
A. the consumers' sensitivity to a price change. B. how much the market supply changes in response to a change in demand. C. how much the demand changes in response to a change in income. D. the producers' sensitivity to a price change.