Explain why the shape of the demand curve will determine how a shock to the market equilibrium affects price and quantity
What will be an ideal response?
A flatter demand curve has a smaller slope in absolute value. That means that consumers are more sensitive to price changes. Therefore, a change in price will cause a large reaction in quantity demanded.
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A central bank commitment to a ________ rule for monetary growth can be conveyed by maintaining a ________ exchange rate
A) rigid, fixed B) rigid, flexible C) flexible, fixed D) non-inflationary, flexible
In which of these markets would the firms be facing the least elastic demand curve?
A) perfect competition B) pure monopoly C) monopolistic competition D) oligopoly
What determines the creditworthiness of any organization, including the federal government?
a. the size of its debt relative to its income base b. the interest rate at which it can borrow money c. the length of time it has existed d. the length of time it is expected to operate
On Saturdays, Stan goes to the park to play his saxophone. Some of the people in the park love listening to Stan play, while others find his music really annoying. In this case, Stan's saxophone playing generates:
A. a positive externality. B. both positive and negative externalities. C. a negative externality. D. neither a positive nor a negative externality.