Economists use what term to describe the want-satisfying power of a good?
A. demand
B. marginal propensity to consume
C. income elasticity
D. utility
Answer: D
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________ refers to alternating periods of economic expansion and economic recession in an economy
A) Fiscal policy B) Labor productivity C) The business cycle D) Positive economic analysis
Which of the following does not hinder successful price leadership?
a. all of the following are correct b. potentially large economic profits due to this activity c. cheating by offering secret discounts d. product differentiation e. illegality of coordinated pricing
When the inflation rate of a country is high over a lengthy time period,
a. the year-to-year variability in the rate of inflation is generally small. b. the year-to-year variability in the rate of inflation is generally large. c. decision makers will be able to forecast future rates of inflation accurately. d. there is no reason to believe that the inflation will exert harmful side effects on real output and the prosperity of the country.
Suppose a Starbucks tall latte costs $4.00 in the United States and 3.20 euros in the Euro area. Also, suppose a McDonald's Big Mac costs $4.40 in the United States and 5.50 euros in Euro area. If the nominal exchange rate is .80 euros per dollar, the prices of which goods have prices that are consistent with purchasing-power parity?
a. both the tall latte and the Big Mac b. the tall latte but not the Big Mac c. the Big Mac but not the tall latte d. neither the tall latte nor the Big Mac