Explain the income effect and the substitution effects of a price change for a normal good
What will be an ideal response?
For normal goods, the income and substitution effects work in the same direction. Higher prices lead to a lower quantity demanded, and lower prices lead to a higher quantity demanded.
You might also like to view...
Foreign investment can give a low-income country
A) no hope to break the vicious cycle of poverty. B) a path to dependency and low growth. C) access to funds for investment and access to technology. D) the means to slow down growth.
What is imperfect competition?
What will be an ideal response?
Under the Bretton Woods system, a fixed exchange rate supported by central banks was known as a(n) ________ exchange rate
A) equilibrium B) par C) fundamental D) target
Describe each of the principles governments consider when deciding which taxes to use
What will be an ideal response?