Refer to the four graphs below. Select the graph above that best shows the changes in demand and supply in the market specified in the following situation: In the market for music CDs sold in stores, if more consumers switch to music-downloads from the
Internet, and the cost of making music CDs decreases because of technological improvement in production.
A. Graph A
B. Graph B
C. Graph C
D. Graph D
C. Graph C
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From time to time, the Federal Reserve buys back government bonds from the private sector through a process called
A) voluntary redemption procedures. B) backflip bond investments. C) open market purchases. D) bond recall procedures.
Why did fewer state banks choose to become or remain members of the Federal Reserve System during the 1960s and 1970s?
A) Nominal interest rates rose. B) The required reserve ratio rose. C) The discount rate rose. D) Open market operations declined.
Ceteris paribus, an increase in the U.S. demand for Greek goods in Figure 36.1 will
A. Result in a movement from M to R on the supply curve for dollars. B. Increase the dollar price of euros above $2 = 1 euro. C. Make U.S. goods more expensive to Greek residents. D. Result in a movement from M to N on the demand curve for dollars.
The tax multiplier is smaller in absolute value than the government purchases multiplier because some portion of the
A) decrease in taxes will be saved by households and not spent, and some portion will be spent on imported goods. B) decrease in taxes will be saved by households and not spent, and some portion will be spent on consumer durable goods. C) increase in government purchases will be saved by households and not spent, and some portion will be spent on imported goods. D) increase in government purchases will be saved by households and not spent, and some portion will be spent on consumer durable goods.