The income elasticity of demand is equal to the percentage change in income divided by the percentage change in quantity demanded
a. True
b. False
Indicate whether the statement is true or false
False
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What are the main differences between the linear stages and international dependency models of development?
What will be an ideal response?
As firms raise output in response to rising aggregate demand,
a) resources become scarce, wages eventually rise, and a point is reached beyond which output cannot expand b) they become increasingly efficient and are thus able to pass the cost savings on to consumers in the form of lower prices c) real wages fall, interest rates rise, and consumers buy less d) they hire fewer workers and substitute capital for labor e) the level of nominal GDP falls, though real GDP rises
What is the opportunity cost of allocating more and more resources to the production of capital goods?
A. a decrease in real income B. the amount of consumption goods that could have been produced C. the increase in pollution D. the environmental goods foregone
Suppose Ariana deposits $75,000 in her bank. If the reserve ratio is 20 percent, this will lead to a maximum increase of ________ in checking account balances throughout all banks.
A. $15,000 B. $375,000 C. $750,000 D. $1,500,000