When the consumer spends less than 1% of his income on a good, demand will be
A) elastic.
B) unit-elastic.
C) inelastic.
D) elastic, unit-elastic or inelastic depending upon supply.
Answer: C
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Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
Gasoline prices in the United States decreased significantly between 2008 and 2009. A decrease in the price of gasoline, holding other things constant, will cause which of the following to occur?
A) increase the demand for gasoline. B) decrease the demand for gasoline. C) increase the quantity of gasoline demanded. D) decrease the quantity of gasoline demanded.
If the nominal interest rate is a constant 15 percent and anticipated inflation falls from 10 percent to 7 percent, the real interest rate would change from
A. 15 to 10 percent. B. 5 to 8 percent. C. 8 to 5 percent. D. 7 to 9 percent.
Money in the United States today includes _______
A. currency and deposits at both banks and the Fed B. the currency in people's wallets, stores' tills, and the bank deposits that people and businesses own C. currency in ATMs and people's bank deposits D. the banks' reserves and bank deposits owned by individuals and businesses