Assume that tortilla chips and salsa are complements. When the price of tortilla chips decreases:
A. the demand for salsa increases.
B. the demand for salsa decreases.
C. the supply of salsa decreases.
D. the demand for tortilla chips decreases.
Answer: A
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According to the quantity theory of money, money growth and inflation are
A) positively correlated. B) negatively correlated. C) independent, that is, not correlated. D) positively correlated if the inflation rate is positive and negatively correlated if the inflation rate is negative.
Ceteris Paribus
What will be an ideal response?
Collective bargaining agreements that prohibit wage cuts for the duration of the contract contribute to:
A. an increase in aggregate supply. B. a price level that is inflexible downward. C. a multiplier effect. D. a wealth effect.
In the Keynesian model, to understand the determination of income and employment it is necessary to understand
A. how interest rates are determined. B. how aggregate demand is determined. C. how long-run aggregate supply is determined. D. how aggregate supply is determined.