Suppose the demand for butter increases from 800 to 1,000 pounds when income falls from $40,000 to 30,000. Income elasticity is:
A. 50.
B. 0.77.
C. -0.77.
D. 0.02.
Answer: C
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Figure 8-2
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In Figure 8-2, which of the following moves can be explained by a tax cut?
A. A to B B. A to C C. A to D D. A to E
One major advantage of the medium of exchange function of money is that it allows society to:
A. use credit cards instead of currency. B. measure the relative worth of products. C. escape the complications of barter. D. transfer purchasing power from the present to the future.
Nominal GDP in 1970 was $1035.6 billion, and in 1980 it was $2784.2 billion. The GDP price index was 30.6 for 1970 and 60.4 for 1980, where 1992 was the base year. Calculate the percent change in real GDP in the decade from 1970 to 1980. Round off to the nearest percentage point.
A. 169% B. 97% C. 136% D. 36%
If you pay $2,640 annually on a $22,000 loan A, and pay $1,800 on a $12,000 loan B, then the interest rate is:
A. 12 percent on loan A and 18 percent on loan B B. 10 percent on loan A and 15 percent on loan B C. 12 percent on loan A and 15 percent on loan B D. 15 percent on loan A and 12 percent on loan B