The key factor that determines whether the supply of a good will be elastic or inelastic is _____.
(A) Output level
(B) Consumption
(C) Time
(D) Price
Ans: (C) Time
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Suppose that the sub sandwich business is a competitive, constant-cost industry. An increase in demand for sub sandwiches, will, in the long-run lead to
a. an increase in price and industry output, but no increase in the output of existing firms. b. no increase in price, no increase in the output of existing firms but an increase in industry output because of new firms. c. no increase in price and an increase in industry output as each existing firm produces more. d. no changes in price, output of existing firms or the number of firms in the industry.
Money demand is given by Md/P = 1000 + .2Y - 1000i. Given that P = 200, Y = 2000, and i = .10, velocity is equal to
A) 0.65. B) 0.75. C) 1.33. D) 1.54.
Until 1933, the U.S. dollar was backed by the ______.
a. silver standard b. gold standard c. standard of living d. word of the government
When the Fed sells bonds in the open market, we can expect
A) bond prices and interest rates to fall. B) bond prices to rise and interest rates to fall. C) bond prices to fall and interest rates to rise. D) bond prices and interest rates to rise.