Long-distance travel by bus is an inferior good. As people's incomes increase and other things remain the same, you predict that the
A) price of long-distance travel by bus will fall and the demand for long-distance travel by bus will increase.
B) price of long-distance travel by bus will fall.
C) demand for long-distance travel by bus will decrease and the price will rise.
D) demand for long-distance travel by bus will increase as the price of long-distance travel by bus falls.
B
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The Fed does not tightly control the monetary base because it does NOT completely control
A) open market purchases. B) open market sales. C) borrowed reserves. D) the discount rate.
A decrease in the money supply will immediately __________ the __________ interest rate, according to the "liquidity effect."
A) raise; natural B) raise; nominal C) lower; natural D) lower; nominal
Economics is a social science that involves the study of how individuals
A) develop their tastes and preferences. B) maximize their wealth. C) define happiness. D) choose among alternatives to satisfy their unlimited wants.
Opportunity costs exist because
a. there is a price attached to virtually every good or service b. technology is not fixed in the economy c. people have different tastes and preferences d. limited resources cannot satisfy all of the wants in society e. the production possibilities frontier is bowed in with respect to the origin