The elasticity of demand for apartments is greatest when
A. local politicians are religious.
B. there are other price controls in towns besides on rent.
C. there are few neighboring towns/suburbs in which to live.
D. there are many neighboring towns/suburbs in which to live.
Answer: D
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The "velocity of circulation" refers to the
A) average speed with which the Fed increases or decreases the quantity of money. B) ratio between the quantity of money and the price level. C) average number of times in a year each dollar is used to buy goods and services. D) average number of times a dollar is deposited and withdrawn from a bank account. E) average speed with which the nominal interest rate changes when the inflation rate changes.
If consumers experience an decrease in lifetime income, current spending will ________, current saving will ________, and future spending will ________
A) decrease; decrease; decrease B) increase; decrease; decrease C) increase; decrease; increase D) increase; increase; decrease E) decrease; increase; increase
Explain how exchange rates affect the level of aggregate economic activity and the price level. Use appropriate AS/AD diagrams to illustrate your answer.
What will be an ideal response?
Private ownership and competitive markets are important for economic growth because they provide individuals with a strong incentive to:
a. care for resources and use them beneficially. b. innovate and introduce new products that are highly valued relative to their cost. c. produce goods efficiently. d. all of the above are correct.