The price elasticity of demand measures the responsiveness of the quantity:
a. demanded to changes in product quality.
b. demanded to changes in income.
c. demanded to changes in price.
d. of supply to changes in demandf
Answer: c. demanded to changes in price.
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During 2015, a country reports aggregate planned expenditures of $5 trillion and an actual real GDP of $4 trillion. During 2015,
A) inventories are less than planned. B) inventories are greater than planned. C) actual aggregate expenditures are greater than real GDP. D) actual aggregate expenditures are less than real GDP. E) inventories are unaffected.
Assume a small nation has the following statistics: its consumption expenditure is $15 million, investment is $2 million, government expenditure on goods and services is $1 million, exports of goods and services to foreigners is $1 million, and
imports of goods and services from foreigners is $1.5 million. Calculate this nation's GDP.
Under the rational expectations hypothesis, which of the following is the most likely short-run effect of a move to a more expansionary monetary policy?
a. higher prices and no change in real output b. higher prices and expansion in real output c. no change in prices but an expansion in real output d. no change in either prices or real output
If a monopolist earns positive economic profits in the long run,
A. the industry supply curve shifts to the right. B. the monopolist expands production. C. the monopolist will not change its behavior. D. new firms will enter the market.