When quantity supplied is very responsive to a change in price, supply is
A. elastic.
B. income sensitive.
C. unit-elastic.
D. inelastic.
Answer: A
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As the economy contracts, tax revenues ________ and transfer payments __________.
A. fall; rise B. fall; fall C. rise; fall D. rise; rise
How is a rise in confidence reflected in the aggregate supply/aggregate demand model?
a. Because a rise in confidence is associated with higher consumption and investment demand, it will lead to an inward shift in the AD curve and shift equilibrium from E0 to E1, a higher quantity of output and a higher price level. b. Because a rise in confidence is associated with higher consumption and investment demand, it will lead to an outward shift in the AD cur and shift equilibrium from E0 to E1, a higher quantity of output and a higher price level. c. Because a rise in confidence is associated with higher consumption and investment demand, it will lead to an outward shift in the AD curve and shift equilibrium from E0 to E1, a higher quantity of output and a lower price level. d. Because a rise in confidence is associated with higher consumption and investment demand, it will lead to an inward shift in the AD cur and shift equilibrium from E0 to E1, a higher quantity of output and a lower price level.
The velocity of money is:
A. money supply divided by prices. B. spending divided by output. C. required monetary reserves divided by income. D. GDP divided by the money supply.
Because of the ________ of vaccinations, economic efficiency would be improved if more people were vaccinated
A) negative externality B) positive externality C) moral hazard D) adverse selection