The above figure shows Jane's budget line and two of her indifference curves. Which of the following happens to Jane's budget line if the price of a lobster dinner fell?
A) It would rotate inward around the vertical intercept, 10 lobster dinners.
B) It would rotate outward around the vertical intercept, 10 lobster dinners.
C) It would rotate inward around the horizontal intercept, 20 steak dinners.
D) It would rotate outward around the horizontal intercept, 20 steak dinners.
D
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The gap between potential GDP and real GDP had been as large as 7 percent during the worst of the 2007-2009 recession. By 2015, the gap
A) was positive, with real GDP exceeding potential GDP. B) had been eliminated. C) was still nearly 3 percent. D) remained at 7 percent.
If the equilibrium interest rate is 4% but the current interest rate is 6%,
a. bond prices will rise. b. money demand will decrease. c. money demand will increase. d. bond prices will fall. e. the money supply will decrease.
If we are trying to determine if two different products are substitutes, complements, or not related at all, we should find the value of the
A) price elasticity of demand for both goods. B) price elasticity of supply for both goods. C) income elasticity of demand for both goods. D) cross elasticity of demand. E) price elasticity of demand and the price elasticity of supply for both goods.
Which of the following statements is correct?
A. Both cash and noncash gift-giving cause value losses. B. Neither cash nor noncash gift-giving causes value losses. C. Noncash gift-giving creates a value loss, but cash gifts do not. D. Cash gifts create a value loss, but noncash gifts do not.