When the price of a product increases, a consumer is able to buy less of it with a given money income. This describes the:
A. cost effect.
B. inflationary effect.
C. income effect.
D. substitution effect.
Answer: C
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If the real interest rate is above the equilibrium real interest rate
A) lenders will be unable to find borrowers willing to borrow all of the available funds and the real interest rate will fall. B) borrowers will be unable to borrow all of the funds they want to borrow and the real interest rate will rise. C) lenders will be unable to find borrowers willing to borrow all of the available funds and the real interest rate will rise. D) borrowers will be unable to borrow all of the funds they want to borrow and the real interest rate will fall.
Examining the conditions that could lead to a recession in an economy is an example of a macroeconomic topic
Indicate whether the statement is true or false
An incumbent firm uses limit pricing
A) to set price below a potential rival's marginal cost, thus making entry unprofitable. B) to set one price for a quantity of a good below a certain limit, and a second price for purchases above the limit. C) when it has no other advantages over a potential rival. D) if it is limited in the quantity of inputs it can purchase to produce output.
People who have two jobs,
A. are counted twice in both the job data and the persons-employed data. B. are counted twice in the job data, but only once in the persons-employed data. C. are counted once in both the job data and the persons-employed data. D. are counted once in the job data, but twice in the persons-employed data.