Suppose a long lost relative died and left you a trust fund worth $1 million that you will receive ten years from now. What effect, if any, will this have on your demand for airline travel? (Assume that airline travel is a normal good.)
What will be an ideal response?
This will likely increase your demand for airline travel, shifting the curve to the right.
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Refer to the table below. Based on their comparative advantage, Martha should specialize in ________ while Julia should specialize in ________. Time to Make a PieTime to Make a CakeMartha60 minutes80 minutesJulia50 minutes60 minutes
A. cakes; pies B. neither pies nor cakes; both pies and cakes C. pies; cakes D. both pies and cakes; neither pies nor cakes
The rules and principles of economics that serve as a guide for action are known as
a. economic policy. b. economic theory. c. macroeconomics. d. microeconomics.
In Japan, interest rates are close to zero. As a result, Keynesians would argue that money demand
a. has become much more interest rate elastic. b. will shift upward. c. has become much less interest rate elastic. d. will shift downward. e. will remain unchanged.
In the Keynesian model, whenever planned saving is more than planned investment
A. there will be unplanned inventory depletion. B. there will be unplanned inventory accumulation. C. the interest rate will remain unchanged. D. real GDP will not be influenced.