Which of the following is true?
A. At the same price, demand is more elastic on the steeper demand curve.
B. On a linear demand curve, the higher the price, the less elastic is demand.
C. On a linear demand curve, elasticity is not constant.
D. None are true.
Answer: C
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The nation's disposable income increases by $400 billion and, as a result, consumer spending increases by $320 billion. Therefore, the MPC equals
a. 0.16. b. 0.20. c. 0.60. d. 0.80. e. 0.96.
Economic conditions favor firms getting larger (producing larger quantity) when the firms are producing under conditions of:
a. Decreasing returns to scale b. Increasing returns to scale c. Constant returns to scale
A maximum limit set on the amount of a specific good that may be imported into a country over a given period of time is called a
A. voluntary export restriction. B. nontariff barrier. C. quota. D. tariff.
The four main policy tools the Federal Reserve System uses to influence the interest rate are setting
A) credit easing, the discount rate, setting tax rates, and setting the required reserve ratio. B) the discount rate, open market operations, extraordinary crisis measures and setting the required reserve ratio. C) quantitative easing, open market operations, setting tax rates, and setting the required reserve ratio. D) quantitative easing, market interest rate and the discount rate, as well as open market operations. E) the prime rate, open market operations, extraordinary crisis management and setting the excess reserve ratio.