For which of the following categories of goods is demand likely to be the most price elastic?
a. automobiles
b. foreign-made automobiles
c. foreign-made sports cars
d. a BMW sports car
D
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On August 15, 1971, the United States
A) returned to the gold standard. B) suspended the convertibility of dollars into gold. C) provided unlimited dollar reserves to the German central bank to help end a speculative attack on the mark. D) provided unlimited dollar reserves to the Bank of England to help end a speculative attack on the pound.
Suppose the price of gasoline rises and consumers cut back on their use of gasoline relative to other consumer goods. This situation would contribute to which bias in the consumer price index?
a. Substitution bias. b. Transportation bias. c. Quality bias. d. Indexing bias.
The convergence theory suggests:
A. that poorer countries will grow faster than rich ones. B. all countries eventually will experience the same rate of growth. C. countries may have the same rate of growth but differing levels of income. D. All of these are true.
If aggregate demand shifts inward over a long period of time, with aggregate supply held constant, the economy should experience
A. unemployment. B. budget surpluses. C. stagflation. D. inflation.