If cars are normal goods, a fall in income will
a. Increase the demand for cars
b. Decrease the demand for cars
c. Have no effect on the demand for cars
d. None of the above
b
You might also like to view...
Differing productivities, differences in working conditions, and localized employer market power are some of the reasons which explain differences in individual wages
Indicate whether the statement is true or false
When a shift in the aggregate supply curve is caused by a change in the price level, the aggregate demand curve also shifts
Indicate whether the statement is true or false
Which of the following is true?
a. Specialization and trade leads to mutual gains for countries. b. Protectionism (i.e., policies that limit trade in certain goods) promotes both economic prosperity and greater employment. c. Countries that have a lot of resources, like the United States, are always hurt by trade. d. Countries will have a higher standard of living when they produce as many goods as possible domestically.
If the economy is self-regulating and in a recessionary gap, what happens?
A) Wages rise, the SRAS curve shifts leftward, and both Real GDP and the price level rise. B) Wages fall, the SRAS curve shifts leftward, the price level rises, and Real GDP falls. C) Wages fall, the SRAS curve shifts rightward, and both the price level and Real GDP fall. D) Wages fall, the SRAS curve shifts rightward, the price level falls, and Real GDP rises. E) none of the above