The value of the absolute price elasticity of demand for good X is 4. The absolute price elasticity for good Y is 1. Which good's quantity demanded is more responsive to a change in price?
A) Good X
B) Good Y
C) They are equally responsive.
D) Not enough information is given.
Answer: A) Good X
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Which of the following will lead to an increase in the gross domestic product of a country?
A) An increase in expenditure on investment goods B) A fall in the expenditure on consumption C) A fall in the expenditure incurred by the government D) An increase in imports
Business cycles are officially dated by:
A) National Bureau of Economic Research, NBER. B) Bureau of Economic Analysis, BEA. C) Bureau of Labor Statistics, BLS. D) none of the above.
Consider the above figure. If the aggregate demand fell from AD1 to AD2, our nation would be experiencing
A) an inflationary gap. B) a recessionary gap. C) overemployment. D) rising prices.
Which of the following would lead to an increase in the demand for fast food in Chicago?
a. An increase in Chicago's population b. A decrease in average consumer income in Chicago. c. A front page newspaper article in Chicago stating that fast food is very bad for your health. d. A decrease in the average price charged by sit-down restaurants.