A friend says, "I really, really need a new car." As an economist, you're thinking
A) Right! Everyone needs a new car.
B) This is an example of how objectively undefinable needs are. Many would argue that this friend could get along just fine with a reliable used car.
C) If this friend says she needs a new car, then we must all agree that a new car is a need and not just a want.
D) that a new car can only be considered a need if at least 51% of the public agrees.
B
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As the capital-labor ratio increases, real GDP per worker ________, and investment per worker ________
A) increases; decreases B) decreases; increases C) increases; increases D) decreases; decreases
A measure of the responsiveness of the demand for one good to the percentage change in the price of another good is
A) price elasticity of demand. B) price elasticity of supply. C) cross price elasticity of demand. D) income elasticity.
An economic expansion tends to cause the federal budget deficit to ________ because tax revenues ________ and government spending on transfer payments ________
A) increase; rise; falls B) increase; fall; rises C) decrease; rise; falls D) decrease; fall; rises
Refer to the information provided in Figure 24.5 below to answer the question(s) that follow.
Figure 24.5Refer to Figure 24.5. If the economy is in equilibrium and the government increases spending by $200 billion, equilibrium aggregate expenditures increase to $________ billion.
A. 1,800 B. 2,000 C. 2,400 D. 3,200