What is measured on the vertical axis of the aggregate demand/aggregate supply model?
A. real Gross Domestic Product (GDP)
B. the interest rate
C. the price level
D. nominal income
Answer: C
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
An 18 percent increase in the price of a small car results in a 10 percent increase in the quantity supplied. The price elasticity of supply is equal to
A) 1.80. B) 0.55. C) 0.75. D) 0.40.
Refer to Figure 15-9. What is the difference between the monopoly output and the perfectly competitive output?
A) 140 units B) 240 units C) 340 units D) 560 units
What would be the value of an option on a stock that sells at a fixed price with a standard deviation of zero? Explain.
What will be an ideal response?