Suppose that good X has few close substitutes and that good Y has many close substitutes. Which good would you expect to have more price elastic demand?
good Y
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If real GDP exceeds potential GDP, to move the economy to potential GDP the Fed
A) raises the federal funds rate to increase potential GDP but not real GDP. B) lowers the federal funds rate to decrease real GDP but not potential GDP. C) raises the federal funds rate to decrease real GDP but not potential GDP. D) lowers the federal funds rate to increase potential GDP but not real GDP. E) raises the federal funds rate to decrease both real GDP and potential GDP.
Which of the following is a leakages from the circular flow?
a. Household saving and government spending b. Business investment and household saving c. Net taxes and household saving d. Government spending and business investment e. Net taxes and government spending
Diversification
What will be an ideal response?
The purpose of the Freedom to Farm Act of 1996 was to:
A. immediately end U.S. farm subsidies. B. end 60 years of U.S. price supports for American grain crops. C. eliminate U.S. tariffs and quotas on imported farm goods. D. stabilize short-run crop prices.