One of the defining characteristics of a perfectly competitive market is what type of product ?
Answer: Standardized product
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Suppose the quantity demanded is 5 units when the price is $1.00. If the price rises to $2.00, the quantity demanded falls to 3 units. The price elasticity of demand is
A) 0.5. B) 0.75. C) 1.33. D) 2.00.
Price flexibility is a key feature of ________
A) traditional Keynesian theory B) new Keynesian theory C) real business cycle theory D) traditional Keynesian, new Keynesian and real business cycle theory
Monetarists believe:
a. the cause-and-effect relationship hypothesized by the Keynesians understates the impact of stimulative monetary policy. b. the cause-and-effect relationship hypothesized by the Keynesians is an accurate description of how monetary policy works. c. since the economy is operating at full employment, any stimulative monetary policy will cause the inflation rate to rise. d. the cause-and-effect relationship hypothesized by the Keynesians is backwards, and decreases in the money supply actually stimulate economic activity. e. the cause-and-effect relationship hypothesized by Keynesians will not work because investment does not respond to changes in interest rates.
If the aggregate expenditure line shows, for a given price level, how planned spending relates to the level of real GDP in the economy, then which of the following is true?
a. The quantity of real GDP demanded is found where aggregate spending equals real GDP. b. The quantity of real GDP demanded is found where the consumption function crosses the 45 degree line. c. The quantity of real GDP demanded is found where intended inventory investment equals government spending. d. The quantity of real GDP demanded is found where intended inventory investment equals to zero.