Ans: D) small menu costs.
If the price of bubble gum changed in the market from 1 cent to 1.5 cents and Joe's Market didn't change the price it charges for the bubble gum, this behavior is likely due to
A) discretionary policy.
B) economic laziness.
C) large menu costs.
D) small menu costs.
Economics
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In the above figure, as the economy adjusts toward equilibrium, the
A) AD curve will shift rightward. B) SAS curve will shift rightward. C) AD curve will shift leftward. D) SAS curve will shift leftward.
Economics
If a firm decreases the price of a good and total revenue decreases, then
A) the demand for this good is price elastic. B) the demand for this good is price inelastic. C) the cross elasticity is negative. D) the income elasticity is less than 1.
Economics
Lags in the policy-making process come from:
A. lack of understanding the current state of the economy. B. the process of deciding on and passing legislation. C. the time it takes for policy to have an impact on the economy. D. All of these are true.
Economics
Which of the following is an example of a managed float?
a. The Fed buys or sells U.S. dollars in order to maintain a fixed $1.05 per euro exchange rate. b. The European Central Bank buys or sells euros in order to "peg" the price level. c. The Bank of England buys or sells British pounds in order to maintain a fixed exchange rate with the U.S. dollar. d. The Bank of Japan intervenes in the foreign exchange market to prevent a rapid depreciation of the yen. e. The Bank of Japan intervenes to set the tax rate very close to the tax rates of other countries.
Economics