Marginal utility theory predicts that as the price of coffee rises, the ________ a substitute for coffee ________ and the ________ coffee ________
A) supply of; increases; demand for; decreases
B) supply of; decreases; supply of; increases
C) demand for; increases; quantity demanded of; decreases
D) demand for; decreases; demand for; increases
C
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Explain why Relative PPP is useful when comparing countries that base their price levels on different product baskets
What will be an ideal response?
A change in which of the following would shift the aggregate demand curve?
a. Consumption (C) b. Investment (I) c. Government spending (G) d. Net Exports (NX) e. All of these
According to James Duesenberry
a. relative income is unimportant b. the MPC decreases as national income increases c. Keynes's absolute income hypothesis is correct but his investment hypothesis is not confirmed by the data d. the consumption function slopes downward e. consumption spending is rooted in status
The costs of inflation that arise from trying to reduce cash holdings are known as:
A. shoe leather costs. B. menu costs. C. chain-index costs. D. diminishing costs.