Suppose the price of natural gas, a typical fuel for heating homes, rises in January in Alaska. Would you expect the price elasticity of demand for natural gas to more inelastic immediately after the price increase or at some point in the future?

The LM curve shows that, with a fixed supply of money, as GDP rises, the demand for money will ____ and the rate of interest will ____.

A) rise; rise B) fall; fall C) rise; fall D) fall; rise

How do high marginal tax rates affect the economic prosperity of a nation?

a. They reduce the incentive of individuals to earn reported income. b. They encourage the nation's most productive citizens to emigrate to countries where taxes are lower. c. They discourage foreigners from investing in the country. d. All of the above are correct.