Businesses are on the:
A. supply side of both factor markets and goods markets.
B. supply side of factor markets and the demand side of goods markets.
C. demand side of both factor markets and goods markets.
D. demand side of factor markets and the supply side of goods markets.
Answer: D
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Cost-push inflation can start with
A) a decrease in government expenditure. B) an increase in oil prices. C) a decrease in investment. D) a decrease in the quantity of money. E) an increase in government expenditure.
Which of the following statements is true?
A) If both demand and supply increase there must be an increase in equilibrium price; equilibrium quantity may either increase or decrease. B) An increase in demand causes a change in equilibrium price; the change in price does not cause a further change in demand or supply. C) If demand decreases and supply increases one cannot determine if equilibrium price will increase or decrease without knowing which change is greater. D) A decrease in supply causes equilibrium price to rise; the increase in price then results in a decrease in demand.
Which of the following will lower the present value of a bond?
a. a fall in the interest rate b. an increase in the principal c. a shorter time to maturity d. an increased risk of default e. none of the above
When a monopolistically competitive firm cuts its price to increase its sales, it experiences a gain in revenue due to the
A) substitution effect. B) income effect. C) price effect. D) output effect.