The cross-price elasticity of demand between good X and good Y is 2.75. Given this information, which of the following statements is true?
A. Goods X and Y are complements.
B. The demand for goods X and Y is inelastic.
C. Goods X and Y are substitutes.
D. The demand for goods X and Y is income inelastic.
Answer: C
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If real GDP decreased by 1% and nominal GDP increased by 2%, then output:
a. increased and the price level increased. b. increased and the price level decreased. c. decreased and the price level increased. d. decreased and the price level decreased.
If the Fed wanted to use all of its policy variables to decrease the supply of money, which of following would that include? a. Increasing its open market sales of government securities. b. Increasing the required reserve ratio
c. Decreasing the interest rate it pays banks on bank reserves. d. It would include all of the above.
This profit-maximizing firm charges a price of about ______.
A. $11.70
B. $14.00
C. $15.20
D. $19.00
What is the domestic price of a TV in a closed economy? 
A. $125 B. $75 C. $137.50 D. $100