What is the most likely result when the price of a good with elastic demand is raised by 10 percent?
(A) The quantity sold will decrease by 15 percent.
(B) The quantity sold will increase by 10 percent.
(C) The quantity sold will decrease by 10 percent.
(D) The quantity sold will decrease by 5 percent.
Ans: (A) The quantity sold will decrease by 15 percent.
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Use the figure below to answer the next question. 
Growth of production capacity is shown by the
A. shift from CD to AB. B. movement away from point B and toward point A. C. movement away from point A and toward point B. D. shift from AB to CD.
If the economy is at full employment
A) the entire population is employed. B) the entire labor force is employed. C) the only unemployment is frictional unemployment plus discouraged workers. D) real GDP equals potential GDP.
When a variable can take on different values
a. it is a random variable b. it is a dependent variable c. it is an dummy variable d. it is an endogenous variable
Figure 32-1
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In Figure 32-1, there are four levels of income. G is government expenditures and TT is taxes less transfers. At which level of income is the actual deficit the greatest?
A. Y4 B. Y3 C. Y2 D. Y1