A good would have a high price elasticity of demand if:
a. there are many close substitutes for the good available in the market.
b. the good is used every day by almost every household in the economy.
c. the good has a low cost in proportion to most consumers' budgets
d. consumers cannot delay the purchase of this good.
a
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Which of the following is NOT an example of a backup line of credit?
A) loan commitments B) overdraft privileges C) standby letters of credit D) mortgages
The IS curve shows the combinations of ________ and ________ where the goods market is in equilibrium
A) aggregate expenditure; real GDP B) the real interest rate; real GDP C) potential GDP; aggregate expenditure D) the nominal interest rate; the quantity of money
Discretionary fiscal policy will stabilize the economy most when:
A. deficits are incurred during recessions and surpluses during inflations. B. the budget is balanced each year. C. deficits are incurred during inflations and surpluses during recessions. D. budget surpluses are continuously incurred.
Farmer Ken in Kentucky can raise either 80 pounds of tobacco or 40 bushels of cotton on an acre. Farmer Calvin in California can raise either 150 pounds of tobacco or 50 bushels of cotton on an acre. Which farmer can produce tobacco more efficiently?
a. Farmer Ken in Kentucky. b. Farmer Calvin in California. c. The two farmers are equally efficient at growing wheat. d. More information is needed to determine comparative advantage.