If the price of a slice of pizza rises from $2.50 to $3, and quantity demanded falls from 10,000 slices to 7,400 slices, calculate the arc price elasticity
A) -1.92
B) -1.64
C) -4
D) -2
B
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Economic growth occurs because
A) labor forces grow. B) capital stocks grow. C) new inventions raise productivity. D) All of the above.
Current Federal Reserve policy focuses on interest rates, rather than on monetary aggregates, because ________
A) monetary aggregates do not provide clear or consistent signals to guide policymakers B) open market operations affect interest rates more directly than they affect monetary aggregates C) according to the Fisher effect, the interest rate is a key determinant of the inflation rate D) all of the above E) none of the above
To understand how poverty, inequality, and discrimination affect the economy, __________ analysis is used, and _________ analysis is used to address whether the government should try to reduce inequality in the name of social justice.
A. positive; objective B. subjective; normative C. normative; positive D. positive; normative