Under a fixed exchange rate system, if the inflation rate of the United States exceeds the inflation rate of other nations, the:
A. dollar will depreciate.
B. dollar will not change.
C. United States will develop a trade deficit.
D. United States will develop a trade surplus.
Answer: C
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Which of the following describes a situation in which demand must be elastic?
a. Total revenue increases by 15 percent when the price of corn dogs rises by 15 percent. b. Total revenue increases by less than 15 percent when the price of corn dogs rises by 15 percent. c. Total revenue decreases by more than 15 percent when the price of corn dogs rises by 15 percent. d. Total revenue increases by $15 when the price of corn dogs rises by $15. e. Total revenue increases by more than $15 when the price of corn dogs rises by $15.
Full employment means which of the following is zero?
a. structural unemployment b. cyclical unemployment c. frictional unemployment d. aggregate unemployment
What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages?
a. Price will fall, and the effect on quantity is ambiguous. b. Price will rise, and the effect on quantity is ambiguous. c. Quantity will fall, and the effect on price is ambiguous. d. Quantity will rise, and the effect on price is ambiguous.
If an increase in the incomes of people who live in the Los Angeles area leads to an increase in the demand for season tickets for games played by the Los Angeles Lakers professional basketball team, then these season tickets are
A. an inferior good. B. an income complement. C. a normal good. D. an income substitute.