In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the
equilibrium quantity (Q) of X. Refer to the given information. If X is an inferior good, a decrease in income will:
A. decrease D, decrease P, and decrease Q.
B. decrease D, decrease P, and increase Q.
C. increase S, decrease P, and increase Q.
D. increase D, increase P, and increase Q.
Answer: D
You might also like to view...
If customer discrimination does not exist, firms that discriminate on the basis of race or sex will
A) have higher costs than those that do not. B) have the same level of costs as those that do not. C) have lower costs than those that do not. D) tend to survive whereas firms that do not discriminate will tend to fail.
If the export supply curve and the import demand curve of tomatoes of Luxembourg intersect at the international price level of tomatoes, then Luxembourg will suspend trading tomatoes in the international market
a. True b. False Indicate whether the statement is true or false
In the simple Keynesian model, an increase in aggregate demand leads to an increase in
A) Real GDP and the price level at all levels of Real GDP. B) the price level and no change in Real GDP for levels of Real GDP below Natural Real GDP. C) the price level and a decrease in Real GDP at all levels of GDP. D) Real GDP and no change in the price level for levels of Real GDP below Natural Real GDP.
Jim transfers money from his money market account to his savings account. This action
a. reduced M1 and increases M2. b. increases M1 and reduces M2. c. has no effect on M1 or M2. d. increases M1 and M2.