Suppose the income elasticity for transportation is 1.8. Which of the following is an INCORRECT statement?
A. Expenditures on transportation grow more rapidly than income grows.
B. Expenditures on transportation will fall less rapidly than income falls.
C. Whenever the income increases by 1 percent, the expenditure on transportation increases by 1.8 percent.
D. Transportation is a normal good.
Answer: B
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The reason why some economists believe that attempts by the Fed to surprise the public in a systematic way cannot be successful is that
A) information about the Fed's plans will inevitably be leaked to the public. B) the Fed announces its goals before Congress and publishes its policy actions in the Federal Reserve Bulletin six weeks after they take place. C) the public would eventually figure out what the Fed's policies were, negating the Fed's surprise. D) competition in the money markets would neutralize the Fed's intervention.
Which of the following examples would enhance the effectiveness of the Fed’s monetary policy?
a. The Fed wants an expansionary policy; the fiscal policy makers want to raise interest rates. b. The Fed wants a contractionary policy; the fiscal policy makers want to increase exports c. The Fed and fiscal policy makers advocate different ways to deal with a recession. d. The Fed and fiscal policy makers both prioritize curbing inflation.
Full employment means which of the following is zero?
A. structural unemployment B. cyclical unemployment C. frictional unemployment D. aggregate unemployment
Refer to the information provided in Figure 13.4 below to answer the question(s) that follow. 
Figure 13.4Refer to Figure 13.4. The ________ level of output for this monopolist is 22 units of output.
A. break-even B. loss-minimizing C. profit-maximizing D. shutdown