Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for frozen yogurt. Which panel describes what happens in the market for frozen yogurt when the price of ice cream, a substitute product, increases?
A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)
C
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The natural unemployment rate is equivalent to all of the following EXCEPT the unemployment rate when:
A. the unemployment rate is zero. B. there is no output gap. C. cyclical unemployment is zero. D. there is only frictional and structural unemployment.
If you decide to go to a movie on a Friday night rather than write a letter to your grandmother, you
A) are willing to deprive your grandmother of a letter simply in order to enjoy a movie. B) place more value on the movie than on your grandmother. C) would rather have fun than fulfill your responsibilities to your relatives. D) none of the above.
During the 1990s the household savings rate in the United States as measured by NIPA
A) increased dramatically from two percent to almost six percent. B) fell sharply and was only 0.7% by the year 2004. C) increased only slightly because the federal budget deficit was finally eliminated. D) fell to two percent when a federal budget surplus appeared.
The "fiscal multiplier" is the ripple effect of subsequent:
A. increases in spending following an initial increase in government spending. B. increase rate changes following a change to the federal funds rate. C. increases in lending following an initial increase in bank reserves. D. private-sector layoffs following an initial layoff in the public sector.