A decrease in the price of rice from 50 cents to 40 cents a pound increases consumption from 16 to 20 tons a week in Gainesville and from 160 to 200 tons in the larger city of Miami. The elasticity of demand for rice is
a. greater in Miami than in Gainesville, even taking into account the population difference.
b. greater in Gainesville than in Miami in spite of the population difference.
c. equal in Gainesville and Miami regardless of the population difference.
d. impossible to compare because of the population difference.
c
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Over long time horizons, the more independent a country's central bank is,
A) the lower the inflation that country experiences. B) the better chance that country has of experiencing hyperinflation. C) the higher the country's unemployment rate tends to be. D) the more politically unstable the country becomes.
If the federal government collects $10 billion in taxes and then spends it on the public, the money supply
A) rises by $20 billion. B) rises by $10 billion. C) falls by $10 billion. D) is unaffected.