Based on these graphs, in both cases _____.
a. RGDP increases
b. RGDP decreases
c. price level increases
d. price level decreases
a. RGDP increases
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Demand is said to be inelastic if a(n) ______.
a. 9 percent price increase causes a 11 percent increase in quantity demanded b. 5 percent price increase causes 6 percent reduction in quantity demanded c. 8 percent price increase causes an 8 percent reduction in quantity demanded d. 10 percent price increase causes a 2 percent reduction in quantity demanded
Which of the following statements about economic models is TRUE?
A) Economic models are not empirically testable. B) The predictive power of models is not as important as they serve the preferences of economists. C) Economic models are designed so that every detail of the real world can be analyzed. D) Every economic model is based on a set of assumptions.
When expenditures change due to changes in the real value of money caused by variations in the price level, this is known as the
A. interest rate effect. B. real-balance effect. C. open economy effect. D. aggregate balances effect.
For each pair of items below determine which product would have the higher price elasticity of demand (in absolute value)
a. Blood pressure medicine for someone who has high blood pressure or the purchase of Clairol hair coloring product. b. A new Ford Fusion or a tank of gas for your current car. c. A Seiko watch or watches in general. What will be an ideal response?