Every Giffen good is a necessity but not every interior good is a necessity.
Answer the following statement true (T) or false (F)
False
Rationale: All inferior goods --- including Giffen goods --- are goods whose consumption moves in the opposite direction from income. Necessities are goods whose consumption increases by less than the percentage increase in income, which is the case if consumption decreases with increases in income.
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Macroeconomics
A) studies the behavior of the economy as a whole. B) involves the interaction between different countries in specific markets. C) studies the behavior of individual consumers, firms and markets. D) studies how computer automation has changed economics.
An equal increase in all bond interest rates
A) increases the return to all bond maturities by an equal amount. B) decreases the return to all bond maturities by an equal amount. C) has no effect on the returns to bonds. D) decreases long-term bond returns more than short-term bond returns.
Using trade restrictions to protect special interests such as the U.S. auto industry
A) results in lower prices for U.S. auto consumers. B) raises the prices that U.S. consumers must pay for autos. C) is a very cost-efficient way of dealing with trade problems. D) is the best long-term solution for threatened U.S. jobs.
In a given year, the inflation rate drops by 2 percentage points and annual output drops by 8 percent. In this case, what is the sacrifice ratio?
a. 2 b. 4 c. 6 d. 8