Suppose you are given the following data on demand for a product. The price elasticity of demand when price decreases from $9 to $7 is:PriceQuantity Demanded$1030940850760670
A. 1.60.
B. 0.63.
C. 2.27.
D. 1.16.
Answer: A
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The United Auto Worker (UAW) would best be classified as
A) a craft union. B) an industrial union. C) a guild. D) closed shop union. E) none of the above
Within the AD/AS model, how does an economy adjust to an output beyond its long-run capacity as a result of an unanticipated increase in aggregate demand?
a. Wage rates and resource prices will fall, causing a decrease in aggregate demand and the restoration of equilibrium at a higher price level. b. Long-run aggregate supply will increase, leading to a new equilibrium at a lower price level. c. Resource prices and real interest rates will rise causing output to fall back to its long-run sustainable rate. d. Lower real interest rates will stimulate demand and restore equilibrium at the initial price level.
Stagflation refers to a situation in which the economy is experiencing:
A. high economic growth and high inflation. B. low economic growth and high inflation. C. high economic growth and low inflation. D. low economic growth and low inflation.
Answer the following statements true (T) or false (F)
1) Strong economic growth since 1960 has allowed nations like Singapore and Ireland to surpass nations such as the United Kingdom and France in real GDP per capita. 2) Strong property rights inhibit economic growth by strictly regulating economic behavior. 3) Strong patent laws encourage innovation and promote economic growth. 4) The intense competition of free trade prevents the investment that generates economic growth. 5) A competitive market system promotes growth by providing producers with market signals on which to base investment and production decisions.