Income elasticity measures the
A. Percentage change in quantity demanded given a percentage change in wealth.
B. Responsiveness of quantity demanded to a percentage change in income.
C. Way in which consumers switch from one product to another when price rises.
D. Responsiveness of quantity demanded for one good to a percentage change in price of another good.
Answer: B
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According to the AS-AD model, when real GDP exceeds potential GDP, the unemployment rate is definitely
A) less than the natural unemployment rate. B) greater than the natural unemployment rate. C) rising. D) falling. E) equal to the natural unemployment rate.
Among the following, which is the broadest measure of stock prices in the United States?
A) Dow Jones Index B) FT index C) Nikkei Index D) Term Structure Index E) Standard and Poor's 500 Composite Index