If a decrease in income results in a decrease in the quantity demanded for a product, the product is ________, and the value of the income elasticity of demand is ________.
A. a normal good; positive
B. a normal good, negative
C. an inferior good; positive
D. an inferior good; negative
Answer: A
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The quantity theory of money states that
A) inflation increases when the money growth rate increases. B) as the price level increases, the demand for money increases. C) as the interest rate rises, the demand for money decreases. D) changes in the quantity of money are determined by the commercial banks and not the Federal Reserve.
In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower prices. C. lower output. D. None of these is true.
The provision of a public good generates a
a. positive externality, as does the use of a common resource. b. positive externality and the use of a common resource generates a negative externality. c. negative externality, as does the use of a common resource. d. negative externality and the use of a common resource generates a positive externality.
Comparative advantage is the ability to produce a good at a lower opportunity cost than others
Indicate whether the statement is true or false