The substitution effect occurs because when the price of one good increases, consumers will buy fewer substitute goods
a. True
b. False
Indicate whether the statement is true or false
False
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Taxes can adversely affect free exchange
Indicate whether the statement is true or false
Suppose the economy is initially experiencing a recessionary gap. A reduction in the size of the budget deficit will cause which of the following in the short run?
A) a reduction in the size of the recessionary gap and increase in real GDP. B) an increase in the size of the recessionary gap and decrease in real GDP. C) an increase in inflation and increase in aggregate supply. D) an inflationary gap.
If a bank has $6,000 in checkable deposits and the required reserve ratio is 0.2, then the bank can lend: a. $4,000
b. $16,000. c. no more than $4,800. d. no less than $3,000. e. $1,000.
An investment has grown from $100.00 to $130.00 or by 30% over four years. What annual increase gives a 30% increase over four years?
A. 7.24% B. 6.30% C. 6.78% D. 7.50%