The law of demand states that, ceteris paribus, an increase in
a. price causes quantity demanded to increase.
b. price causes quantity demanded to decrease.
c. quantity demanded causes price to increase.
d. quantity demanded causes price to decrease.
b
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If the government increases spending while holding taxes constant, we expect
A) a decrease in real saving as consumers follow suit and also increase borrowing. B) planned real investment spending by businesses to increase. C) an increase in investment spending by businesses too, as they anticipate future economic growth. D) interest rates to rise.
The long-run Phillips curve applies when the economy is at full employment, so the long-run Phillips curve is ________, which demonstrates that changes in the inflation rate ________ effect on unemployment
A) horizontal; have no B) an upward sloping straight line with a 45 degree slope; have an C) vertical; have no D) vertical; have an E) a downward sloping straight line with a 45 degree slope; have an
What is an example of the substitution effect?
A. The firm expands output when production costs fall. B. The firm hires more labor when the wage falls because labor has become relatively cheaper compared to the price of other factors of production. C. Workers choose to provide more hours of labor when the wage rate decreases. D. More labor is hired as long as the marginal product of labor is positive. E. The firm expands output when production costs increase.
Which of the following is NOT a contributing factor into why the high-growth Asian economies were able to rapidly accumulate physical and human capital?
A) A stable macroeconomic environment meant low inflation. B) Loans from multilateral institutions such as the IMF, the World Bank, and regional development banks. C) The demographic transition meant that the proportion of their population working was higher. D) A rapid rise in income made greater amounts of savings possible.