According to the law of demand, a decrease in the price of a good causes
A) a rightward shift of the demand curve for that good.
B) a leftward shift of the demand curve for that good.
C) an upward movement along the demand curve for that good.
D) a downward movement along the demand curve for that good.
Answer: D
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Economists assume that business firms attempt to maximize their profits.
Answer the following statement true (T) or false (F)
During the financial crisis in 2007 and 2008, financial institutions believed that default risks were higher. As a result, there was ________ in the supply of loanable funds and a ________ in the real interest rate
A) a decrease; fall B) an increase; rise C) an increase; fall D) a decrease; rise
Lack of prudential regulation of capital markets in East Asia often led to
a. borrowing short term and lending long term b. borrowing and lending short term c. borrowing and lending long term d. borrowing long term and lending long term e. very little borrowing
An increase in income causes the demand for inferior goods to_____________ and the price of inferior goods to ____________
a. Increase; increase b. Increase; decrease c. Decrease; increase d. Decrease, decrease