When two goods are complements, their cross-price elasticity of demand is:
A. equal to one.
B. positive.
C. negative.
D. zero.
Answer: C
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Suppose two economies, the United States and Saudi Arabia, each have a GDP of $1,000 . A U.S. war effort involves the purchase of $100 of Saudi oil, which is financed by selling $100 worth of U.S. government bonds to Saudi Arabia. During the war period,
a. U.S. civilian and war consumption stays at $1,000 while Saudi consumption falls to $900 b. U.S. civilian and war consumption increases to $1,100 while Saudi consumption stays at $1,000 c. U.S. civilian and war consumption increases to $1,100 while Saudi consumption falls to $900 d. U.S. civilian and war consumption stays at $1,000 and Saudi consumption stays at $1,000 e. U.S. civilian and war consumption stays at $1,000 while Saudi consumption rises to $1,100
When a firm is experiencing economies of scale, long-run
a. average total cost is minimized. b. average total cost is greater than long-run marginal cost. c. average total cost is less than long-run marginal cost. d. marginal cost is minimized.
How are the effects of the financial crisis shown using the Phillips curve diagram?
Economic stagnation coupled with high inflation is commonly called:
A. stagflation. B. inflationary stagnation. C. stagnatory growth. D. inflagnation.