When the money supply increases by 5 billion, tax revenues are 10 billion, and government borrowing is 30 billion, government spending must equal:
a. 10 billion.
b. 15 billion.
c. 20 billion.
d. 35 billion.
e. 45 billion.
Question 2
Shaina and Mariah have a business that provides personal fitness training services. They know that after raising their prices from 100 to 150 per hour, the quantity of hours they spent delivering training services fell from 45 to 40 hours per week. The demand for their services is:
a. elastic, with a price elasticity coefficient greater than one.
b. elastic, with a price elasticity coefficient less than one.
c. inelastic, with a price elasticity coefficient greater than one.
d. inelastic, with a price elasticity coefficient less than one.
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