The intertemporal substitution effect of the price level on aggregate demand
A) is the same as the real wealth effect.
B) is one reason that the aggregate demand curve has a negative slope.
C) explains why aggregate demand increases when the amount of money increases.
D) is one reason that the aggregate demand curve has a positive slope.
B
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Suppose that Sam likes pears twice as much as apples, meaning that he is always indifferent between consuming one pear or two apples. Sam's indifference curves for pears and apples are
a. right angles. b. bowed inward. c. bowed outward. d. downward-sloping straight lines.
Suppose a concert by Rihanna and a basketball game played by the Houston Rockets are substitutes, then which of the following is TRUE?
A) If the price of a ticket to a Rockets game increases, then the demand for Rihanna tickets will fall. B) If the price of a ticket to a Rockets game decreases, then the demand for Rihanna tickets will fall. C) If the price of a ticket to a Rockets game increases, then the demand for Rihanna tickets will remain unchanged. D) The price of a ticket to a Rockets game will always equal the price of a ticket to a Rihanna concert.
The set of all possible bundles of goods and services that can be purchased with a consumer's income is referred to as the:
A) demand set. B) supply set. C) budget set. D) universal set.
Questions about employment history on a loan application are used to prevent
A) moral hazard. B) adverse selection. C) market signaling. D) risk aversion.