Fiscal policy would be more effective if:
A. the government could change taxes and expenditures rapidly.
B. potential income was unknown.
C. the size of the government debt didn't matter.
D. crowding out occurred more often.
Answer: A
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Refer to the scenario above. The GDP deflator for Year 2 is ________
A) 240 B) 0.14 C) 87.5 D) 114.3
If the value of the price elasticity of demand is 0.2, this means that:
a. a 20 percent decrease in price causes a 1 percent increase in quantity demanded. b. a 0.2 percent decrease in price causes a 1 percent increase in quantity demanded. c. a 5 percent decrease in price causes a 1 percent increase in quantity demanded. d. a 0.2 percent decrease in price causes a 0.2 percent increase in quantity demanded. e. a 100 percent decrease in price causes a 200 percent increase in quantity demanded.