For a particular good, an 8 percent increase in price causes a 4 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
a. There are many close substitutes for this good.
b. The good is a luxury.
c. The market for the good is broadly defined.
d. The relevant time horizon is long.
c
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Refer to Table 19-24. Suppose that a very simple economy produces three goods: pizzas, haircuts, and backpacks. Suppose the quantities produced and their corresponding prices for 2011 and 2016 are shown in the table above
Use the information to compute real GDP in the year 2011 and 2016. Calculate real GDP in 2016 assuming the base year is 2011. Do the same calculation assuming the base year is 2016. Are the calculations different? Why?
The short-run aggregate supply curve shows that a change in inflation will cause (a) change(s) in ________
A) output B) potential output C) expected inflation D) price shocks E) all of the above