Elasticities measure the response of one variable to random shocks from unknown factors
Indicate whether the statement is true or false
False
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
Refer to Scenario 10.7. How many ink pads will be produced to maximize revenue?
A) 0 B) 250 C) 300 D) 500 E) none of the above
If aggregate demand is $2,000 billion and aggregate supply is $2,300 billion, the price level will rise.
Answer the following statement true (T) or false (F)
Market failure establishes a basis for:
a) Government intervention. b) Private goods. c) Market power. d) Externalities.