The term price elasticity of supply measures:
The responsiveness of quantity supplied to changes in price
The responsiveness of quantity demanded to changes in price
The responsiveness of consumer preferences to changes in price
The responsiveness of production costs to changes in price
Correct Answer :
A. The responsiveness of quantity supplied to changes in price
Related Questions
The term hyperinflation refers to:
An extremely high and rapidly increasing inflation rate
A moderate and stable inflation rate
A period of deflation in the economy
A period of steady economic growth
Which of the following is an example of a public good?
National defense
A private car
A pair of shoes
A restaurant meal
The aggregate demand curve shows the relationship between:
The price level and the quantity of real GDP demanded
The interest rate and investment spending
The price level and the quantity of money demanded
The exchange rate and net exports
If the government decreases taxes and increases government spending, it is implementing:
Expansionary fiscal policy
Contractionary fiscal policy
Expansionary monetary policy
Contractionary monetary policy
The term perfectly elastic demand refers to a situation where:
Consumers are willing to buy any quantity of a good at a given price
Consumers are only willing to buy a fixed quantity of a good at any price
The quantity demanded of a good does not change regardless of the price
The demand for a good is perfectly inelastic
The term marginal cost refers to:
The additional cost of producing one more unit of a good or service
The total cost of producing a given quantity of a good or service
The average cost of producing all units of a good or service
The fixed cost of producing a given quantity of a good or service
The term monetary policy refers to:
Central bank policies related to interest rates and money supply to influence the economy
Government policies related to taxation and spending to influence the economy
Policies aimed at regulating international trade
Policies related to the regulation of financial markets
The term fiscal policy refers to:
Government policies related to taxation and spending to influence the economy
Central bank policies related to interest rates and money supply
Policies aimed at regulating international trade
Policies related to the regulation of financial markets
The term ceteris paribus means:
All else equal
Let the buyer beware
Supply creates its own demand
The invisible hand
The term supply-side economics focuses on:
Policies that aim to increase the productive capacity of the economy
Policies that aim to increase aggregate demand in the economy
Policies that aim to control inflation through monetary policy
Policies that aim to control inflation through fiscal policy
The term long-run Phillips curve suggests that there is a trade-off between:
Inflation and unemployment in the long run
Inflation and output in the short run
Government spending and taxes
Monetary policy and fiscal policy
The term marginal propensity to save (MPS) refers to:
The change in saving resulting from a change in disposable income
The total amount of saving in an economy
The change in consumption resulting from a change in disposable income
The total amount of consumption in an economy
The term monetary policy transmission mechanism refers to:
The process through which changes in monetary policy affect the overall level of economic activity
The process through which changes in fiscal policy affect the overall level of economic activity
The process through which changes in exchange rates affect the overall level of economic activity
The process through which changes in international trade affect the overall level of economic activity
The term automatic stabilizers refers to:
Government policies that automatically adjust to stabilize the economy during economic fluctuations
The tools used by the central bank to stabilize the money supply
The policies implemented by the government to control inflation
The policies implemented by the government to control unemployment
If the government implements expansionary fiscal policy, it will likely lead to:
Higher inflation and higher economic growth
Lower inflation and lower economic growth
Higher inflation and lower economic growth
Lower inflation and higher economic growth
If the government implements contractionary fiscal policy, it will likely lead to:
Lower inflation and lower economic growth
Higher inflation and higher economic growth
Higher inflation and lower economic growth
Lower inflation and higher economic growth
The term government budget surplus occurs when:
Government revenues exceed government expenditures in a given period
Government expenditures exceed government revenues in a given period
Government revenues and expenditures are equal in a given period
Taxes are too high
The term commodity money refers to:
Money that has intrinsic value, such as gold or silver
Money that is backed by the government's promise to exchange it for a commodity
Money that is used for international trade
Money that is created by the central bank
The term consumer surplus refers to:
The difference between the highest price a consumer is willing to pay for a good and the price they actually pay
The difference between the cost of production and the price at which a good is sold
The total amount of money spent by consumers on goods and services
The total amount of money earned by consumers from their jobs
The long-run aggregate supply curve is vertical because it is determined by:
The level of government spending
The level of potential output
The level of aggregate demand
The level of inflation
The term structural unemployment refers to unemployment that occurs due to:
Mismatch between the skills of workers and the skills required by employers
Fluctuations in the business cycle
Temporary transitions between jobs
Changes in aggregate demand
Which of the following is a measure of the overall level of prices in an economy?
Consumer Price Index (CPI)
Gross Domestic Product (GDP)
Money Supply (M2)
Aggregate Demand (AD)
The term externalities refers to:
The uncompensated impact of one person's actions on the well-being of a bystander
The difference between the private cost and the social cost of producing a good
The total cost incurred in producing a good or service
The total cost of producing all units of a good or service
The term Phillips curve depicts the relationship between:
Inflation and unemployment
Government spending and taxes
Savings and investment
Consumption and income
If the nominal interest rate is 5% and the inflation rate is 3%, the real interest rate is:
8%
2%
3%
5%
If the government increases taxes and decreases government spending, it is implementing:
Contractionary fiscal policy
Expansionary fiscal policy
Contractionary monetary policy
Expansionary monetary policy
The term Laffer curve is used to illustrate the relationship between:
Tax rates and tax revenue
Government spending and economic growth
Inflation and unemployment
Interest rates and investment
If the economy is in a recessionary gap, it implies that:
Actual output is less than potential output
Actual output is greater than potential output
The inflation rate is high
The unemployment rate is low
The term frictional unemployment refers to unemployment that occurs due to:
Temporary transitions between jobs or careers
Mismatch between the skills of workers and the skills required by employers
Changes in aggregate demand
Fluctuations in the business cycle
The natural rate of unemployment is:
The level of unemployment that occurs when the economy is at full employment
The level of unemployment that occurs when the economy is in a recession
The level of unemployment that occurs when there is no frictional or structural unemployment
The level of unemployment that occurs when there is no cyclical unemployment