List three things that can cause an increase in demand. Be specific
What will be an ideal response?
Student responses will vary but may include:
(1.) An increase in income (normal good).
(2.) A decrease in income (inferior good).
(3.) An increase in the price of a substitute good.
(4.) A decrease in the price of a complementary good.
(5.) A change in preferences (the product is more desirable than before).
You might also like to view...
The natural rate hypothesis argues that the economy will:
a. self-correct to the natural rate of inflation. b. require expansionary fiscal policy to reach the natural rate of unemployment. c. self-correct to the natural rate of unemployment. d. require expansionary monetary policy to reach the natural rate of unemployment.
If GDP is too low relative to potential GDP, which of the following is true?
A. Unemployment is higher than normal. B. A recession has just begun. C. Inflation is higher than normal. D. Deflation will occur.
The "negative-amortization" mortgage typically converts later to a
A. traditional mortgage with a higher payment. B. "exotic" mortgage with a lower payment. C. new "negative-amortization" mortgage with an even lower payment. D. traditional mortgage with a lower payment.
An equation for M1 is
A. M2 + Savings Accounts - Currency Held Outside Banks + Other Near Monies. B. Money Market Accounts + Automatic-transfer Savings Accounts. C. M2 - Savings Accounts - Money Market Accounts - Other Near Monies. D. M2 + Near Monies.