If the price of grapes increases, total expenditures on grapes will decline if
a. there are few substitutes for grapes.
b. the supply of grapes is inelastic.
c. the demand for grapes is elastic.
d. grapes are a normal good.
C
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Suppose the U.S. inflation rate falls while the inflation rate among the members of the European Monetary Union (EMU) holds constant. Other things equal, what will happen in the balance of payments accounts?
What will be an ideal response?
It is sometimes claimed that garbage collectors are paid more than elementary school teachers. If this is true, one reason might be
a. the difference in working conditions b. that school teachers are usually women c. that the supply of teachers is small d. that the demand for teachers is small e. that the market does not value teachers
"Rivalry" in consumption means that:
A. when one person buys a good, it is not available for another person to buy. B. there are many buyers of the good. C. there are multiple sellers of the good. D. a buyer may purchase goods from multiple sellers.