If a seller lowers the price of a product when demand is price inelastic, the seller can expect revenues to
A) rise.
B) fall.
C) stay the same.
D) either rise or fall, but it is impossible to determine which.
Answer: B
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Over the last decade, a country experiences a significant increase in labor productivity
a. Draw and label a labor market supply and demand diagram. Show how the equilibrium real wage rate and the equilibrium quantity of labor change as productivity increases. b. Draw and label a production function. Show how potential GDP changes as labor productivity increases.
Suppose that domestic investment in Japan is 20.2% of GDP, and Japanese national savings is 24% of GDP. What is Japan's foreign investment as a percentage of GDP?
A) 1.19% B) 3.8% C) 27.8% D) 44.2%
In the above figure, over the price range P5P6, demand is
A) unit elastic. B) elastic. C) perfectly inelastic. D) inelastic.