Which of the following statements is FALSE regarding consumer choice?
A) Each change in price has a substitution effect and a real income effect.
B) When price falls, the consumer chooses in favor of the cheaper good.
C) Diminishing marginal utility is one reason for a downward sloping demand curve.
D) Purchasing power has an inverse relationship with the rise in income.
Answer: D
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Refer to Figure 19.3. At the exchange rate of 90 yen per dollar, the United States is experiencing a
A) balance of payments deficit. B) current account deficit. C) capital account surplus. D) balance of payments surplus.
Draw a scatter diagram of the interest rate and the unemployment rate. Describe the relationship
What will be an ideal response?
Under which of the following conditions will there be no substitution bias in the CPI?
A) Indifference curves are convex. B) Indifference curves are L-shaped. C) Indifference curves are linear. D) Indifference curves are downward sloping.
When one currency appreciates, another currency must depreciate
a. True b. False Indicate whether the statement is true or false