If the cross-elasticity of demand for two goods is negative, this means that:
a. only the poor will buy the goods.
b. they are normal goods.
c. the goods are substitutes.
d. the goods are complements.
d
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In a simplified banking system with a 20 percent required reserve ratio, a $1,000 open-market sale by the Fed would cause the money supply to:
a. increase by $200 b. decrease by $200. c. decrease by $5,000 d. increase by $5,000.
Which of the following is not a probable consequence of food aid to developing countries?
a. Increased domestic food prices b. Declining domestic output c. Misallocation of food supplies d. Increased dependency on foreign food supplies e. Increased starvation of the needy
The fall of actual GDP below the level of potential GDP is a signal that the economy is in a recession
a. True b. False Indicate whether the statement is true or false
Which of the following economic forces promotes profitability in the long run?
A. A large number of complementary products B. Existence of strong barriers to entry. C. A large number of close substitute products. D. Both a and b E. All of the above