When the absolute price elasticity of demand equals 2.5, demand is
A) elastic.
B) unit-elastic.
C) inelastic.
D) undetermined without more information.
A
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Suppose that aggregate demand increases along the upward sloping portion of the aggregate supply curve. What is the result?
A) Real GDP increases more than nominal GDP increases. B) Nominal GDP and real GDP increase by the same amount. C) Nominal GDP increases more than real GDP increases. D) Nominal GDP and real GDP decrease by the same amount.
What is the opportunity cost of producing capital goods such as a new road?
What will be an ideal response?
In a competitive labor market, if the supply of labor decreases, wages will:
A. increase. B. decrease. C. remain the same. D. drop to zero.
Cyclical unemployment is:
A. long-term and chronic unemployment that exists even when the economy is producing at a normal rate. B. the extra unemployment that occurs during periods of recession. C. short-term unemployment that is associated with the process of matching workers with jobs. D. the additional unemployment not captured in official statistics resulting from discouraged workers and involuntary part-time workers.