If aggregate planned expenditure is greater than GDP, then
A) the consumption function will shift downward to restore the equilibrium.
B) a recession will result.
C) inventory investment is larger than planned.
D) production is too high.
E) inventory investment is smaller than planned.
E
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Suppose a local photographer increases his prices by 8 percent and quantity demanded decreases by the same percentage. This set of facts indicates that the demand for his services is
A) inelastic. B) elastic. C) unit elastic. D) perfectly elastic. E) perfectly inelastic.
Why are prices for groceries and household items typically higher at a 24-hour convenience store compared to stores open from 6 am to 11 pm?
A) Shoppers' options are generally fewer in the middle of the night. B) The elasticity of demand of the middle-of-the-night shopper is typically higher than the mid-day shopper's elasticity. C) The owners of the 24-hour stores are typically more selfish than the others. D) The owners of the 24-hour stores are more interested in maximizing net revenue compared to the others.