Recall the Application about the incentives to install rooftop solar panels to answer the following question(s).According to the Application, a 10 percent increase in the tax credits for solar panels results in an increase in the number of households that install solar panels by 7.6 percent. The increase in sales due to this subsidy is an example of which element of the economic way of thinking?
A. responding to incentives
B. isolating variables
C. thinking at the margin
D. using assumptions to simplify
Answer: A
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A(n) ________ in the supply of loanable funds ________ the real interest rate and ________ investment
A) increase; raises; decreases B) decrease; raises; increases C) increase; raises; increases D) decrease; raises; decreases E) decrease; lowers; decreases
Explain how “herd behavior” affects the stock market and contributes to recession.
What will be an ideal response?
Greater scarcity of a natural resource is indicated
a. by an increase in the price of the resource, whether the price increase is less than or greater than the rate of inflation. b. only by an increase in the price of the resource that is less than the rate of inflation. c. only by an increase in the price of the resource that is greater than the rate of inflation. d. only by an increase in the price of the resource that is caused by a decrease in supply and is greater than the rate of inflation.
The Keynesian consumption function is in an economy C = 10 + 0.8 Yd. When disposable income is €1000, what is total consumption?
(a) 0.8 (b) 800 (c) 810 (d) 0.81