When two goods are unrelated
A) the demands for both goods will be inelastic.
B) cross price elasticity of demand will be 0.
C) cross price elasticity of demand will be negative.
D) cross price elasticity of demand will be positive.
B
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A deliberate change in the government's deficit
A) constitutes discretionary fiscal policy. B) leads to automatic stabilization. C) acts as a drag on the economy. D) is implemented by the Fed.
When deciding whether or not to provide a public good, a government's policy should be to provide the good where society's marginal benefit is smaller than the marginal cost of the good
a. True b. False Indicate whether the statement is true or false
The ratio of government debt to GDP since 1940 indicates that the U.S. has mostly been:
a. a net creditor by at least 20% of the value it produces each year. b. a net creditor by at least 10% of the value it produces each year. c. a net borrower by at least 20% of the value it produces each year. d. a net borrower by at least 40% of the value it produces each year.
If the labor force grows at a faster rate than the number employed, the
a. unemployment rate will fall. b. unemployment rate will rise. c. labor force participation rate will fall. d. employment rate will rise.