If price is cut and demand is elastic, then
A) total revenue will fall.
B) total revenue will not change.
C) quantity demanded will fall.
D) total revenue will rise.
D
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Illustrate with a graph the effects of fiscal policy when exchange rates are fixed
What will be an ideal response?
The modern view of the Phillips curve suggests that
a. when inflation is less than anticipated, unemployment will rise above the natural rate. b. monetary policy will be unable to affect inflation. c. when people accurately anticipate inflation, expansionary monetary policy will reduce unemployment. d. when inflation exceeds what was anticipated, the natural rate of unemployment will rise.
Domestic saving must equal domestic investment in
a. both closed and open economies. b. closed, but not open economies. c. open, but not closed economies. d. neither closed nor open economies.
Consider a small open economy with desired national saving of Sd = 200 + 10,000rw and desired investment of Id = 1000 - 5000rw. If rw = 0.05, then a rise in government spending of 50 with no change in private saving causes net exports to become
A) 100. B) 50. C) -50. D) -100.