The income elasticity of demand is a measure of the responsiveness of the
A) quantity of a good demanded to changes in income.
B) consumer's income to a change in the price of the goods he or she consumes.
C) quantity of a good demanded to changes in its price.
D) quantity of a good demanded to changes in another good's price.
A
You might also like to view...
Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Which of the following statements is TRUE?
A) A monopoly cannot set price and quantity such that the point lies above the demand curve. B) A monopoly can charge whatever it wants. C) Profit maximization occurs by setting price first. D) Both A and B.
What effect does an expansionary monetary policy in the U.S. have on the foreign trade sector?
A) The lower value of the dollar will decrease exports and increase imports. B) The lower value of the dollar will decrease imports and increase exports. C) The higher value of the dollar will decrease exports and increase imports. D) The higher value of the dollar will decrease imports and increase exports.
Which of the following is illustrated by the distance between the aggregate expenditure line and the 45-degree line at each level of real GDP?
a. The level of saving in an economy b. Unplanned inventory change c. Planned investment undertaken in an economy d. The marginal propensity to save e. The marginal propensity to consume