In the above figure, along which range would the demand for this good be most elastic?
A. between point c and point d
B. between point d and point e
C. between point a and point b
D. at point e
Answer: C
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If assets are imperfect substitutes, then a decrease in the amount of domestic currency bonds held by the public will ________ the risk premium and ________ the amount of domestic currency bonds held by the central bank
A) decrease; leave unchanged B) increase; decrease C) increase; increase D) decrease; decrease E) leave unchanged; decrease
A breakdown of financial markets can result in
A) financial stability. B) rapid economic growth. C) political instability. D) stable prices.
Crowding out occurs when the federal government:
a. raises taxes to finance a budget deficit. b. refinances maturing U.S. Treasury bonds. c. borrows by selling bonds to finance a deficit. d. uses a budget surplus to pay off part of the national debt.
Which of the following steps should you follow when using a formula?
A) Make sure the number you calculate using the formula is economically reasonable
B) Make sure you understand the economic concept the formula represents
C) Make sure you are using the correct formula for the problem you are solving
D) All of the above are steps you should follow when using a formula