Over short time periods, deficits can help the economy cope with shocks
Indicate whether the statement is true or false
TRUE
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Mick Jagger, a former student at the London School of Economics, once sang, “You can’t always get what you want, but if you try sometime, you just might find you can get what you need.” Another statement of the basic economic principle expressed in this lyric is that
A. rational decisions are not always possible. B. you can allocate your resources to what gives you the highest value. C. you can create the supply to meet your own demand. D. you can maximize social welfare by making optimal decisions.
At $5 per cup, customers will buy 8 cups of coffee per week. At a price of $3, consumers are willing to buy 12 cups per week. The elasticity of the market demand curve for coffee between P = $5 and P = $3 (dropping all minus signs) is
A. 0.40. B. 1.0 C. 1.25. D. 0.80.
A two-part price is less efficient than a Ramsey
Indicate whether the statement is true or false
If workers expect inflation, and negotiate wage increases that exactly match price increases, the result is a
A. horizontal aggregate supply curve at the level of potential GDP. B. vertical aggregate supply curve at the level of potential GDP. C. horizontal aggregate demand curve at the level of potential GDP. D. vertical aggregate demand curve at the level of potential GDP.