Which of the following will cause a rightward shift of the demand curve?
A) a decrease in the cost of production
B) a decrease in the price of the good
C) an increase in the expected future price of the good
D) all of the above
C
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If Ben becomes less likely to buy smoke detectors after he has fire insurance, he is illustrating
A) moral hazard. B) adverse selection. C) the lemon problem. D) the free rider problem.
According to the circular flow model, all else constant, an increase in government spending should cause an increase in spending, income, and production in the economy
Indicate whether the statement is true or false
One way to estimate GDP is to:
A. add together the market value of only final goods sold in the economy and not services. B. measure the total expenditure of an economy. C. add together the market value of only final services sold in the economy. D. add up all the money people spend buying final and intermediate goods and services.
The Fed
A) always engages in countercyclical policy. B) always intends to engage in procyclical policy. C) can engage in procyclical policy if it mistimes its policy response. D) never intends to engage in countercyclical policy.