Demand for cigarettes is
A. relatively elastic.
B. relatively inelastic.
C. increasing in the U.S.
D. greater among wealthier people.
B. relatively inelastic.
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Expressing the U.S. federal budget deficit as a percentage of Gross Domestic Product (GDP)
A) results in inflation-adjusted revenue and expenditure numbers. B) helps us understand the size of the deficit relative to the size of the economy. C) was useful through the 1980s, but is no longer helpful because both the deficit and real Gross Domestic Product (GDP) have grown so large. D) is only useful if the budget deficit is rising at an annual rate of more than 4 percent.
If excess reserves are $10 million, (total) reserves are $14 million, and the required reserve ratio is 10%, then required reserves equal ________________ and checkable deposits equal ____________________
A) $4 million; $40 million B) $40 million; $4 million C) $24 million; $240 million D) $7 million; $70 million
Which of the following is not a function of the Federal Reserve System?
A) to clear checks B) to supervise member banks C) to serve as the lender of last resort D) to handle the sale of U.S. Treasury securities E) to serve as the government's tax collector
Suppose product price is fixed at $24; MR = MC at Q = 200; AFC = $6; AVC = $16. What do you advise this firm to do?
A. Increase output. B. Decrease output. C. Stay at the current output; the firm is losing $200. D. Stay at the current output; the firm is earning a profit of $400.