If a good is a necessity, the income elasticity of demand must be
A. positive.
B. negative but less negative than -1.
C. negative and more negative than -1.
D. zero.
Answer: C
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Almost every time that there has been an inverted yield curve, what took place within one year?
A) recession B) rising inflation C) financial crisis D) higher bond yields
If a natural disaster were to cause a negative long-run supply shock to the economy, once the economy adjusts, the new equilibrium will be at a:
A. higher price level and lower level of output. B. lower price level and lower level of output. C. higher price level and higher level of output. D. lower price level and higher level of output.
The use of seat belts and other automobile safety features making bicycling more hazardous can be explained by the economic concept known as:
A. the real-nominal principle. B. the marginal principle. C. the principle of voluntary exchange. D. the principle of diminishing returns.
Which of the following is an example of a horizontal merger?
A. Northeastern Illinois University going from a public to a private university. B. Northeastern Illinois University merging with a training academy for new professors. C. Northeastern Illinois University merging with Bush University. D. Northeastern Illinois University merging with a local bookstore.