The percentage change in quantity demanded divided by the percentage change in income is the formula for:
a. cross-price elasticity of demand.
b. income elasticity of demand.
c. elasticity of savings.
d. wage elasticity of labor supply.
b. income elasticity of demand.
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If aggregate expenditure is less than GDP, how will the economy reach macroeconomic equilibrium?
a. Inventories will decline, and GDP and employment will decline. b. Inventories will rise, and GDP and employment will decline. c. Inventories will decline, and GDP and employment will rise. d. Inventories will rise, and GDP and employment will rise.
Firms that are most likely to buy marketable pollution rights are those that produce the most pollution per unit of output produced
Indicate whether the statement is true or false
The real rate of interest is the
A) nominal rate of interest minus the anticipated rate of inflation. B) current rate actually paid by the borrower. C) difference between the bank's lending and savings rates. D) current rate which the government pays on its debt.
Fighting inflation by slowing the growth of aggregate demand is
a. endorsed by most politicians. b. a convenient way to reduce inflation. c. unpopular with politicians. d. always easily accepted by firms and workers.