Sugar and coffee are complements. When the price of coffee decreases, the demand for sugar
A. will shift inward.
B. will shift outward.
C. remains constant.
D. will fall.
Answer: B
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If countries that imported goods and services from the United States recovered from recession, we would expect that U.S. net exports would
a) fall, making aggregate-demand curve shift to the right. b) rise, making aggregate-demand curve shift to the left. c) rise, making aggregate-demand curve shift to the right. d) fall, making aggregate-demand curve shift to the left.
Which of the following is an example of an automatic stabilizer?
A. Congress legislates lower tax rates to increase consumption and investment. B. Tax rates are increased during a recession to maintain a balanced budget. C. A regressive income tax system reduces tax revenues (as a share of income) as income expands. D. Revenues from the corporate income tax increase sharply during a business boom but decline substantially during a recession, even though no new tax legislation has been enacted.
Suppose that when disposable income increases by $1,000, consumption spending increases by $750. Given this information, we know that the marginal propensity to save (MPS) is
A. 1.33. B. 4. C. 0.75. D. 0.25.
The hand soap industry is an example of a(n) ________ industry.
A. monopolistic B. perfectly competitive C. oligopolistic D. monopolistically competitive