In the above figure, over the price range P1P2, demand is
A. perfectly elastic.
B. inelastic.
C. unit elastic.
D. elastic.
Answer: D
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Refer to Goods X and Y. Which of the following would cause the vertical intercept to move upwards?
Assume that good X is on the horizontal axis and good Y is on the vertical axis in the consumer-choice diagram. PX denotes the price of good X, PY is the price of good Y, and I is the consumer's income. Unless otherwise stated, the consumer's preferences are assumed to satisfy the standard assumptions. a. A decrease in the price of good Y. b. An increase in the price of good X. c. An increase in the price of good Y. d. A decrease in the price of good Y.
Durbin's alternative test is valid even if the explanatory variables are strictly exogenous.
Answer the following statement true (T) or false (F)
The crowding-in effect depends on the sensitivity of investment to
A. GDP, as does the crowding-out effect. B. interest rates, whereas the crowding-out effect depends on the sensitivity of investment to GDP. C. interest rates, as does the crowding-out effect. D. GDP, whereas the crowding-out effect depends on the sensitivity of investment to interest rates.
Fractional reserve banking is the system that
A. limits banks' activities from crossing state lines. B. allows banks not to insure their deposits. C. allows banks to keep smaller reserves than their deposits. D. allows banks not to join the Federal Reserve System.