If service stations raise the price of gasoline and experience a decrease in demand for automobile tires, then gasoline and tires are:
a. Substitute goods
b. Inferior goods
c. Complementary goods
d. Economic goods
c. Complementary goods
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Suppose a bank has $200,000 in deposits, a required reserve ratio of 25 percent, and bank reserves of $100,000. Then this bank can make new loans in the amount of
A. $20,000. B. $100,000. C. $50,000. D. $25,000.
When crowding out occurs, higher government spending results in higher interest rates, which in turn results in:
A. higher inflation. B. less consumption and investment. C. a larger debt ceiling. D. more tax revenues.
Does an expansionary gap or a recessionary gap exist if short-run output is $18.2 trillion and potential output is $18.0 trillion?
What will be an ideal response?
The price of a coupon bond can best be described as the:
A. future value of the coupon payments. B. present value of the face value plus the present value of the coupon payments. C. future value of the coupon payments and the face value. D. present value of the face value.