If Bart has budget constraint A in the graph shown, what would cause his budget constraint to shift to B?
This graph shows three different budget constraints: A, B, and C.
A. Bart's income has decreased.
B. The price of soda has increased.
C. The price of soda has decreased.
D. The price of milk has increased.
B. The price of soda has increased.
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Which of the following statements is true?
A) A decrease in supply causes equilibrium price to rise; the increase in price then results in a decrease in quantity demanded. B) If demand increases and supply decreases one cannot determine if equilibrium price will increase or decrease without knowing which change is greater. C) An increase in demand causes an increase in equilibrium price; the increase in price causes supply to increase. D) If both demand and supply decrease, there must be a decrease in equilibrium price; equilibrium quantity may either increase or decrease.
From the new classical perspective, the disinflation in the early 1980s resulted in a significant recession because
a. the policy change to disinflation was unanticipated. b. the policy was not credible. c. inflationary expectations were backward looking. d. None of the above e. both a and b.
If stocks are more risky than bonds, why would a rational investor ever buy stocks?
Which of the following would cause E1 to move to E2?
a. P1 moving to P2 and D2 moving to D1
b. S1 moving to S2 and Q2 moving to Q1
c. P1 moving to P2 and Q1 moving to Q2
d. S1 moving to S2 and D2 moving to D1