If the Fed buys U.S. Treasury bills and bonds to finance deficits, this means that the government is financing the deficit by
A. selling capital.
B. lowering inflation.
C. raising interest rates.
D. printing money.
Answer: D
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Which of the following statements is inconsistent with an elastic demand curve?
A. The relative change in quantity exceeds the relative change in price. B. Total revenues fall when prices rise. C. Buyers are relatively sensitive to price changes. D. The absolute value of the price elasticity of demand is less than 1.
Governments exist to
A) maintain property rights. B) provide non-market mechanisms for allocating scarce resources. C) implement arrangements that redistribute wealth and income. D) all of the above.
If two goods are perfect complements, the shapes of the indifference curves are
A) bowed toward the origin. B) bowed away from the origin. C) straight lines. D) right-angled lines.
One of the differences between the GDP deflator and the consumer price index is
a. the GDP deflator includes income earned by American citizens working in foreign countries and the consumer price index is based solely on purchases made in the U.S. b. the consumer price index basket of goods is updated constantly by the Bureau of Labor Statistics whereas the GDP deflator is updated only occasionally. c. the consumer price index includes items not included in the GDP deflator such as airplanes purchased by the Air Force. d. the GDP deflator reflects prices for all goods and services produced domestically and the consumer price index reflects prices for some goods and services bought by consumers.