According to the text, which of the following statements is true?
A. The price elasticity of Honda Accords exceeds the price elasticity of demand for BMWs.
B. The price elasticity of BMWs exceeds the price elasticity of demand for Honda Accords.
C. The cross-price elasticity of demand for Hondas and BMWs is relatively large.
D. The income elasticity of demand for BMWs is negative.
A. The price elasticity of Honda Accords exceeds the price elasticity of demand for BMWs.
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If the intersection of the IS curve with the horizontal axis comes at a level of output below the natural level of output, the Fed
A) can easily bring the economy back to the full-employment level of output. B) loses control of the economy. C) must use contractionary model policy to correct economic problem. D) must decrease money supply and ignore interest rates.
A labor union is likely to seek all of the following EXCEPT
A) economic improvements for their members. B) safer working conditions. C) increased competitiveness in the labor market. D) increased job security for its members.
Adverse selection refers to when:
A. one party to a transaction has more information than the other and this results in a bargaining dispute. B. one party selects the wrong strategy and they are displeased with their selection. C. one party to a transaction has more information than the other and transactions occur less frequently due to the information asymmetry. D. neither party is willing to be party to a transaction because they don’t have enough information.
On an aggregate level, free trade produces a net __________ and restricted trade produces a net __________
A) loss; loss also B) benefit; benefit also C) benefit; loss D) loss; benefit