Price elasticity is unit elastic at the midpoint of a linear, downward-sloping demand curve
a. True
b. False
A
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What are economies of scale?
a. decreasing average costs as production increases b. increasing average costs as production increases c. increasing fixed costs as production increases d. none of the above
According to purchasing-power parity, if the same basket of goods costs $100 in the U.S. and 50 pounds in Britain, then what is the nominal exchange rate?
a. 2 pounds per dollar b. 1 pound per dollar c. 1/2 pound per dollar d. None of the above is correct
If consumers tend to buy higher quantities of goods and services for which prices rose in the past year compared to the quantities of goods and services for which prices fell, we would say the economy has likely experienced
A. reflation B. stagflation C. deflation D. inflation
If the government undertakes expansionary fiscal policy, it:
A. should force people to change their spending patterns. B. expects aggregate demand to decrease. C. expects aggregate demand to increase. D. could increase income taxes.