Scooters are a normal good and buyers' incomes decrease. Which of the figures above best illustrates how this change affects the demand curve for scooters?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) None of the above answers is correct because the decrease in income will affect the supply curve not the demand curve.
B
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Suppose the Consumer Price Index is 143.6. What does that number mean?
A) On average, goods cost $143.60. B) On average, goods cost $243.60. C) Prices rose 143.6 percent over the reference base period, on average. D) Prices rose 43.6 percent over the reference base period, on average.
What would be the effect on U.S. interest rates if the Chinese and Japanese governments sold all their U.S. government securities?
A. Interest rates would rise. B. Interest rates would fall. C. The selling of Chinese and Japanese U.S. government securities would have very little effect on U.S. interest rates.
A reduction in the rate of inflation would be
A. deflation. B. hyperinflation. C. disinflation. D. crawling inflation.
When supply and demand for a product decrease simultaneously, we
A. can predict that both equilibrium price and quantity will increase. B. cannot predict the change in either the equilibrium quantity or equilibrium price. C. can predict that both equilibrium price and quantity will decrease. D. cannot predict equilibrium price, but know that equilibrium quantity will decrease.