Why would a bumper crop be bad news for farmers?
A. Their crop has an inelastic demand and the resulting drop in price reduces their total revenue.
B. Their crop has an elastic demand and the resulting drop in price reduces their total revenue.
C. Their crop has an inelastic demand and the resulting drop in price raises their total revenue.
D. Their crop has an elastic demand and the resulting drop in price raises their total revenue.
Answer: A
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Explain the Keynesian theory of money demand. What motives did Keynes think determined money demand? What are the two reasons why Keynes thought velocity could NOT be treated as a constant?
What will be an ideal response?
If a union establishes by collective bargaining a wage rate that is above a competitive market equilibrium wage rate, then
A) an excess quantity of labor will be supplied.
B) a shortage of labor will result.
C) there will be an increase in total employment.
D) management will want to substitute labor for machinery.
When the demand for a product does not fluctuate when there is a change in price, the good is ________.
a. inelastic. b. elastic. c. unit elastic. d. perfectly inelastic.
As the economy moves up and to the left along the IS curve, which of the following will occur when exchange rates are flexible?
A) investment spending decreases B) consumption decreases C) the domestic currency appreciates D) all of the above E) none of the above