If a lower price for good X increases the demand for good Y, the cross elasticity value for the two goods is
A) negative.
B) equal to zero.
C) positive and less than one.
D) positive and greater than one.
E) possibly negative, positive, or zero, but there is not enough information to decide.
A
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Employers and workers in the protected industry know that the consequences of protection are principally:
a. lower prices for their output, lower profits for owners, and lower wages for workers. b. higher prices for their output, lower profits for owners, and lower wages for workers. c. higher prices for their output, lower profits for owners, and higher wages for workers. d. lower prices for their output, higher profits for owners, and higher wages for workers. e. higher prices for their output, higher profits for owners, and higher wages for workers.
Explain the impact of the multiplier effect through the business cycle.
What will be an ideal response?
When government spending is added to the basic macroeconomic model, the multiplier for G would
a. be higher than the multiplier for autonomous spending. b. be lower than the multiplier for autonomous spending. c. be equal to the multiplier for autonomous spending. d. have no relationship to the autonomous spending multiplier.
Interest paid by households and by the government is
A. not counted in GDP because it is not assumed to flow from the production of goods and services. B. not counted in GDP but is counted in GNP because it is paid by U.S. citizens to people living in the United States. C. counted in national income, but not in GDP. D. included in both GDP and GNP because it represents an expenditure by one group and a receipt of income by another group.