The income effect of a price change is depicted by
a. a parallel shift of the budget constraint at the old set of prices.
b. a parallel shift of the budget constraint at the new set of prices.
c. a movement along the budget constraint holding the level of satisfaction constant.
d. not observable and is therefore neither a shift nor a change in the slope of the budget constraint.
b
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What will be an ideal response?
If the U.S. interest rate, adjusted for people's expectation of inflation, increases sharply relative to the rest of the world, then
A) there will be a decrease in the demand for dollars in foreign exchange markets. B) there will be no change in the demand for dollars in foreign exchange markets but there will be an increase in demand for foreign currency. C) the dollar will appreciate. D) the dollar will depreciate.
Bureaucratic control emphasizes which organizational element?
a. hierarchy and authority b. budget and market influences c. benchmarking statistics d. product quality assurance