The price elasticity of supply is a measure of the responsiveness of:
A. the change in price to the quantity supplied.
B. the suppliers with respect to the change in price.
C. the quantity supplied to the change in income.
D. the quantity supplied to the changes in price.
Answer: D
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The quantity theory asserts that real GDP is
A) not influenced by the quantity of money. B) never different from potential GDP. C) equal to nominal GDP multiplied by the quantity of money. D) equal to nominal GDP divided by the quantity of money.
Which of the following is not a situation involving external shock?
(A) Consumers reduce spending on expensive goods because the country has gone to war. (B) Consumers use more gasoline because of lower prices due to the discovery of large deposits of oil. (C) Consumers pay high prices for corn because of a severe drought. (D) Consumers reduce spending because they fear that their nation is going to war.