Generally, as goods are more broadly defined,
a. demand becomes more price elastic
b. demand becomes less price elastic
c. total expenditure falls as the price decreases
d. the demand curve becomes straighter
e. more substitute goods can be identified
B
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Answer the following statements true (T) or false (F)
Economies cannot function without money. The amount of national income in an economy equals the money supply in an economy. Liquidity increases as we move from the M1 to the M2 definition of the money supply. If gold is used as money in an economy, the money supply is easy to control. Commodity money can be used only as a medium of exchange.
Under the monetary growth rule proposed by the monetarists, the money supply would grow each year at a constant rate equal to the long-run rate of growth of
A) employment. B) inflation. C) interest rates. D) real GDP.
U.S. data suggest that the U.S. economy is located where on the Laffer curve?
A) On the right side, after the peak in tax revenue. B) On the left side, before the peak in tax revenue. C) At the peak in tax revenue. D) The economy was on the right side before the 1980s and on the left side after 1980.
Economists build economic models by
a. generating data.
b. conducting controlled experiments in a lab.
c. making assumptions.
d. reviewing statistical forecasts.