If demand is unit-elastic throughout the demand curve, then total revenues are
A. lower the higher the price.
B. the same for any price the firm charges.
C. greater the higher the price.
D. maximized at the midpoint of the demand curve.
Answer: B
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If the rate of growth in real GDP exceeds the rate of growth in the money supply, the quantity theory of money predicts a price deflation
Indicate whether the statement is true or false
The price elasticity of demand is the ratio of the change in quantity demanded to the change in price
a. True b. False Indicate whether the statement is true or false
During recessions declines in investment account for about
a. 1/6 of the decline in real GDP. b. 1/7 of the decline in real GDP. c. 1/3 of the decline in real GDP. d. 2/3 of the decline in real GDP.
The consumption function
A. is a relationship between annual consumption and annual disposable income in an economy. B. will shift upward if aggregate household wealth declines. C. implies that annual consumption in an economy will be zero if disposable income is zero. D. is a flat line with zero slope.