The most important determinant of price elasticity of supply is
A) the number of close substitutes there are for the good.
B) the time period firms have to adjust to the new price.
C) the price of the good.
D) the importance of the good in the budgets of consumers.
Answer: B
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In a multiple regression problem involving two independent variables, if b1 is computed to be +2.0, it means that:
A) the relationship between X1 and Y is significant. B) the estimated value of Y increases by an average of 2 units for each increase of 1 unit of X1, holding X2 constant. C) the estimated value of Y increases by an average of 2 units for each increase of 1 unit of X1, without regard to X2. D) the estimated average value of Y is 2 when X1 equals zero.
In the long-run ISLM model and with everything else held constant, the long-run effect of a tax cut is to ________ real output and ________ the interest rate
A) increase; increase B) increase; not change C) not change; increase D) not change; decrease