Which of the following is the most likely effect of lower apple juice prices on the price and quantity purchased of orange juice, a substitute product?
A. The price of orange juice will increase, and the quantity purchased will fall.
B. The price of orange juice will fall, and the quantity purchased will increase.
C. The price of orange juice will increase, and the quantity purchased will increase.
D. The price of orange juice will fall, and the quantity purchased will fall.
Answer: D
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Which of the following is NOT an argument against using monetary policy to prick asset-price bubbles?
A) The effect of increasing interest rates on asset prices is uncertain. B) A bubble may only exist in some asset-prices and monetary policy will affect all asset prices. C) Using monetary policy to prick an asset-price bubble may have adverse effect on the aggregate economy. D) Even though credit-drive bubbles are easier to identify, they are still relatively hard to identify.
In a market system, the major coordination tasks are carried out
a. with the approval of central planners. b. as part of the regular appropriation process of Congress. c. irregularly by the major corporations. d. automatically by the market mechanism.
On the basis of the rational expectations theory we can say that, the aggregate supply in an economy depends on what sort of macroeconomic course policy makers are expected to pursue
Indicate whether the statement is true or false
The basic concern of economics is to:
A) keep business firms from losing money. B) prove that capitalism is better than socialism. C) study the choices people make. D) use unlimited resources to produce goods and services to satisfy limited wants.