The wealth effect explains the:
A. downward-sloping aggregate demand curve.
B. downward-sloping aggregate supply curve.
C. upward-sloping aggregate demand curve.
D. upward-sloping aggregate supply curve.
Answer: A
You might also like to view...
The substitution effect indicates that higher real interest rates ________ current consumption for households who are lenders and ________ current consumption for households who are borrowers
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
According to research by William Shepherd, competition has increased in U.S. industries since World War II due to
a. both c and d b. all of the following c. international trade d. deregulation e. antitrust activity
Trent decides to spend an hour playing basketball rather than studying. His opportunity cost is: a. nothing because he enjoys playing basketball more than studying
b. the foregone benefit to his grades from studying for an hour. c. the increase in skill he obtains from playing basketball for that hour. d. nothing because he had a free pass into the sports complex to play basketball.
Compared to the market demand curve, a demand curve facing a monopolistically competitive firm would be
a. more elastic. b. vertical. c. horizontal. d. the same as the market demand curve. e. less elastic.