Elasticities are used to measure responses to a change in:
A. the price of a related good.
B. the price of a good.
C. income.
D. All of these are true.
Answer: D
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Credit card balances are not considered to be money primarily because they
A. are not part of people's wealth. B. are an asset used in making transactions. C. are rarely used to make purchases. D. do not represent an obligation to pay someone else.
Which of the following is a likely objective of monetary policy?
A) achieving price stability B) stabilizing economic activity C) closing the output gap to zero D) all of the above E) none of the above
A production possibilities frontier is a straight line when
a. the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. b. an economy is interdependent and engaged in trade instead of self-sufficient. c. the rate of tradeoff between the two goods being produced is constant. d. the rate of tradeoff between the two goods being produced depends on how much of each good is being produced.
Table 5.3National Income Accounts (dollar figures are in billions)Expenditures for consumer goods and services$8,200Exports$1,700Government purchases of goods and services$2,500Social Security taxes$1,900Net investment$1,400Indirect business taxes$1,400Imports$1,900Gross investment$1,800Corporate income taxes$600Personal income taxes$1,500Corporate retained earnings$130Net foreign factor income$100Government transfer payments to households$1600Net interest payments to households$500On the basis of Table 5.3, the value of the income aggregate that is defined as "the part of disposable income not spent on current consumption" (also known as savings) is
A. $370 billion. B. $500 billion. C. $8,570 billion. D. -$500 billion.