All of the following factors are held constant when price changes on a demand curve except:
A) income.
B) quantity demanded.
C) population.
D) tastes and preferences.
B
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Refer to Table 4.1. A change in the price of hamburgers caused the change in quantity demanded shown in the table. The price elasticity of demand for hamburgers (calculated using the initial value formula) is:
A. 0.25. B. 0.50. C. 1. D. 1.75.
Jaime transfers $2,500 from his checking account to his savings account. This transaction will
A. not change M1 and decrease M2. B. decrease M1 and not change M2. C. increase both M1 and M2. D. decrease both M1 and M2.
Monopolistically competitive firms have a "monopoly" element to them because
A. There is only one seller. B. The cross-price elasticity is very high. C. Brand loyalty gives them a captive audience. D. There are high barriers to entry.