If a consumer increases her quantity of ice cream consumed by 100% when her income rises by 25%, then her income elasticity of demand for ice cream is
A) 8.0.
B) 4.0.
C) .25.
D) .08.
B
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The larger the multiplier, the more stable the economy
a. True b. False
When we focus on the firm as a supplier of a good or a service, we assume that the firm is a profit maximizer. When we focus on the firm as a demander of labor, we assume that the firm's objective is to
a. minimize wages. b. minimize variable costs. c. maximize the number of workers hired. d. maximize profit.
Advocates of "fixed policy rules" believe
A. That fine-tuning can improve macro outcomes. B. That the economy is better off using discretionary policy. C. In constant increases in the money supply and balanced federal budgets. D. That politicians can best determine when to stimulate and restrain the economy.
The present discounted value of $100 payable 1 year from now, assuming a market rate of interest of 10 percent, is:
A. $100. B. $10. C. $90. D. slightly less than $90. E. slightly more than $90.