If two goods are complements:
A. an increase in the price of one will increase the demand for the other.
B. they are necessarily inferior goods.
C. they are consumed independently.
D. a decrease in the price of one will increase the demand for the other.
Answer: D
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According to Monetarists, a direct substitution between cash balances and real goods results from a change in
A) investment spending. B) consumption spending. C) government spending. D) the money supply.
Which of the following is a characteristic of a competitive market?
a. There are many buyers but few sellers. b. Firms sell differentiated products. c. There are many barriers to entry. d. Buyers and sellers are price takers.
The four components of aggregate expenditures are:
A. consumption, imports, government spending, and net exports. B. consumer durables, investment, government spending, and net exports. C. consumption, investment, government spending, and net exports. D. consumption, interest payments, government spending, and net exports.
If you regularly spend $100 a month on gasoline and the price of gasoline doubles, your purchasing power has
A) increased. B) remained constant. C) became stable. D) decreased.