An increase in price causes an increase in total revenue when demand is
a. elastic.
b. inelastic.
c. unit elastic.
d. All of the above are possible.
b
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The experience of the 1970s and 1980s suggests that the cost of engaging in the process of disinflation is that
A. exports must increase. B. deflation must occur. C. nominal interest rates will be expected to increase. D. unemployment will most likely increase.
Positive economics questions "What ought to be?" Normative economics predicts the consequences of alternative actions, answering the questions "What is?" or "What will be?"
Answer the following statement true (T) or false (F)
What could explain why a decrease in taxes could lead to a less-than proportionate increase in output ?
A. Consumers may choose to save much of the tax cut in anticipation of having to pay higher taxes in the future. B. As a result of diminishing returns to current consumption, consumers may choose to spread the extra spending over the long term rather than consuming the proceeds of a tax cut all at once. C. A decrease in taxes will necessitate lower government outlays, thus largely offsetting the higher consumption expenditures of households. D. All of the above. E. A and B only
Generally, the longer the maturity on a bond, the lower the interest rate
a. True b. False