When an economy is below full employment and the government has a budget deficit, that deficit _________.
What will be an ideal response?
exceeds the structural deficit
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Prices communicate information about relative availability of products. For example, a decrease in the price of corn signals to consumers and producers that: a. consumers are buying more corn than before
b. corn is relatively more abundant than before. c. corn is relatively less abundant than before. d. consumers are stocking up on corn because of the predictions of a cold winter.
Which is the most accurate statement?
A. Doctors' incomes are high because the demand for their services is high relative to the supply. B. Doctors' incomes are high because the supply of their services is high relative to the demand. C. Doctors' incomes are low because the demand for their services is high relative to the supply. D. Doctors' incomes are low because the supply of their services is high relative to the demand.
The largest single component of aggregate demand is ______.
a. investment spending b. exports c. disposable income d. consumption
If the value of the price elasticity of demand is 0.2, this means that:
A. a 20 percent decrease in price causes a 1 percent increase in quantity demanded. B. a 0.2 percent decrease in price causes a 1 percent increase in quantity demanded. C. a 5 percent decrease in price causes a 1 percent increase in quantity demanded. D. a 0.2 percent decrease in price causes a 0.2 percent increase in quantity demanded.