Estimations of demand are used as input in this type of scenario:
A. understanding the demand for oil in order to impose a new oil import tax.
B. understanding automobile demand to decide whether to offer below-market-rate loans for new cars.
C. as input into a firm's decision-making process.
D. all of the above
D. all of the above
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
Differentiate between the following
a) Normal goods and inferior goods b) Substitutes and complements
The curve labeled A in the above figure is a
A) short-run aggregate demand curve. B) short-run aggregate supply curve. C) long-run aggregate demand curve. D) long-run aggregate supply curve.
Answer the following statement(s) true (T) or false (F)
1. The consumer price index (CPI) tracks changes in price at the wholesale level. 2. Change in prices is an important economic indicator because it is a measurement of consumer's purchasing power. 3. Cyclical unemployment measures those out of work during the off-season, such as those employed in agriculture and snow-, beach-, or holiday-related industries. 4. Higher productivity results in higher costs and higher prices, resulting in lower income and lower profitability. 5. A recession is a decline in the gross national product (GNP) over two or more consecutive quarters of the year.