Your annual review is given to you at your place of employment, and you get a raise of 3 percent for the next year. On the subway home though, you read an article stating the price of homes in the area you are looking to buy will increase by 6 percent
during the coming year. You determine from the article that if you buy in your favorite neighborhood
A) your purchasing power declines.
B) consumer optimum is reached.
C) your real income actually increases.
D) quantity demanded will increase.
Answer: A
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Which of the following would most likely induce the Federal Reserve to conduct expansionary monetary policy? A significant decrease in
A) business taxes. B) oil prices. C) investment spending. D) income tax rates.
The most important driver for the global economy is likely to be:
Shopping at a warehouse, such as Sam's Club or Costco, allows its members to pay very low prices on the goods and services they buy. Customers who shop at such a store incur:
A. no transaction costs because members can return any item purchased for any reason. B. transaction costs because they must be members to shop there. C. transaction costs because they must buy a product in bulk. D. no transaction costs because they pay prices that are lower than any other location.
Quotas and tariffs both serve the purpose of
A) increasing foreign trade. B) restricting foreign trade. C) causing domestic producers to lose revenues. D) lowering prices on imported goods.