If the quantity of houses supplied in an area increases 10 percent when the price goes up 25 percent, the supply:
A. is inelastic.
B. is perfectly elastic.
C. is elastic.
D. is unit elastic.
Answer: A
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If the economy is in long run equilibrium and aggregate demand increases, then in the short run
A) nothing happens because the economy is in long run equilibrium. B) the price level rises and real GDP does not change. C) real GDP increases and the price level does not change. D) the price level rises and real GDP increases.
If an American construction company built a road in Kuwait, this activity would be
A) excluded from U.S. GNP. B) fully included in U.S. GDP. C) included in U.S. GNP only for that portion that was attributable to American capital and labor. D) included in U.S. GDP but not in U.S. GNP.
The marginal propensity to consume measures the ratio of the:
a. average amount of our disposable income that we spend. b. average amount of our savings that we spend. c. change in consumer spending to a change in money holdings. d. change in consumer spending to a change in interest rates. e. change in consumer spending to a change in disposable income.
Which of the following is a flow variable?
a. the number of cars registered in the U.S. b. the number of unemployed workers this week c. your total net worth yesterday d. the government debt this year e. a salary of $4,000 per month