If a 2 percent rise in price leads to a 4 percent decrease in quantity demanded, then demand is
A) elastic and total revenue decreases.
B) elastic and total revenue increases.
C) inelastic and total revenue decreases.
D) elastic, but we cannot tell what happens to total revenue without more information.
E) Total revenue decreases but we cannot tell if the demand is elastic or inelastic without more information.
A
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Some economists argue that increases in government spending are not a likely source of continued inflation because
A) increases in government spending cause reductions in other spending components. B) government spending is not created by the Fed. C) increases in government spending can be financed by money creation. D) a and b E) a and c
The reason for the different in tax policy and spending policy by the government is due to:
A. people not responding to tax policy as much as spending policy. B. the fact that when the government engages in spending policy, they do it more aggressively. C. firms drastically responding to tax changes that are implemented. D. the difference in initial spending that results from engaging in tax policy.