The law of demand states that as the price
a. increases, total quantity demanded will increase.
b. decreases, total quantity demanded will decrease.
c. increases, total quantity demanded will decrease.
d. increases, total quantity demanded will stay the same.
c
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If you were building a macroeconomic model that explores the effect of an increase in income tax rates on the size of the labor force, the endogenous variable(s) would be
A) income tax rates. B) the size of the labor force. C) both income tax rates and the size of the labor force. D) neither income tax rates nor the size of the labor force.
Suppose the economy currently has an inflationary gap. The Fed engages in contractionary monetary policy. The impact of contractionary monetary policy will be to
A) increase short-run aggregate supply, decrease in prices and decrease in real GDP. B) increase short-run aggregate supply, decrease prices and increase real GDP. C) decrease aggregate demand, decrease prices, and increase real GDP. D) decrease aggregate demand, decrease prices, and decrease real GDP.
Your income rises from $1,000 a year to $10,000 and your purchases of beer increase from 10 to 20. What number below most closely approximates your income elasticity over this range?
A. 2.5 B. 4 C. 1 D. 0.4
Which of the following characteristics is generally representative of developed countries relative to developing nations?
A. a shorter life expectancy B. a smaller percentage of the population working in agriculture C. a higher rate of infant mortality D. a smaller percentage of children enrolled in college