If a good has an income elasticity of demand greater than 1, one might classify that good as
A) a necessity.
B) a luxury.
C) unusual.
D) inelastic.
B
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Rational voter ignorance occurs because the marginal cost of obtaining information is higher than the marginal benefit from obtaining the information
a. True b. False Indicate whether the statement is true or false
If most people found the lifestyle of an assembly-line worker less desirable relative to that of persons in other professions, one would expect the return on the human capital investment of
a. assembly-line workers to be higher than that of persons in other professions. b. assembly-line workers to be lower than that of persons in other professions. c. assembly-line workers and that of persons in other professions to be nonetheless equal. d. both assembly-line workers and persons in other professions to be unaffected by the subjective preferences of investors.
A decrease in government expenditures serves as an example of an adverse supply shock
a. True b. False Indicate whether the statement is true or false
If the Fed buys $10 million dollars in government securities, and the required reserve ratio is 20 percent, the banking system is able to expand the money supply by:
A. $10 million. B. $50 million. C. $2 million. D. $40 million.