If people cannot distinguish between goods A and B, then economists describe the goods as
a. having a zero cross elasticity
b. being perfect substitutes
c. belonging to an oligopolistic industry
d. belonging in different markets
e. having a cross elasticity of one
B
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M1 is a measure of
A) money and includes both currency and checking deposits. B) liquidity and in which the most liquid asset is money. C) money and includes both savings deposits and currency. D) money and includes both savings deposits and money market mutual funds.
According to supply-side economics, a cut in taxes will affect total tax revenue, because ________
A) the level of productivity should fall precipitously with a tax cut B) a tax cut will be followed by an even larger decrease in government spending C) of the resulting increase in saving D) of the positive impact on the level of income