Ray just got a raise, and decided to splurge on a fancy dinner to celebrate. The change to Ray's demand for fancy dinners could be measured by the:
A. price elasticity of supply.
B. price elasticity of demand.
C. cross-price elasticity.
D. income elasticity of demand.
D. income elasticity of demand.
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The real rate of interest is the
A) nominal rate of interest minus the anticipated rate of inflation. B) current rate actually paid by the borrower. C) difference between the bank's lending and savings rates. D) current rate which the government pays on its debt.
In the aggregate expenditures model, the equilibrium real GDP is
A. assumed to be equal to the full-employment real GDP level. B. always less than the full-employment real GDP level. C. always above the full-employment real GDP level. D. not necessarily equal to the full-employment real GDP.
All of the following are true about the basic money supply except:
A. It includes credit card balances. B. It includes currency held by the public. C. It includes money kept in transactions accounts. D. It is known as M1.
If average product is falling, what is happening to short-run average variable cost?
A. If average productivity is falling, short-run average variable cost is also falling; to say that productivity falls is equivalent to saying that cost falls. B. If average productivity is falling, short-run average variable cost could be rising or falling; it depends on what is happening with marginal productivity. C. Short-run average variable costs are always falling. They are not related to average product. D. If average productivity is falling, short-run average variable cost is rising; to say that productivity falls is equivalent to saying that cost rises.