Suppose the price of home heating oil is unchanged, yet we observe people purchasing 20% more than a year ago. Then
A) the demand for home heating oil has increased.
B) the demand for home heating oil has decreased.
C) the demand for home heating oil has remained unchanged—only quantity demanded changed.
D) the law of demand has been proven false.
A
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Which of the following characteristics of perfect competition does not apply in monopolistic competition?
A. Free entry and exit B. Homogeneous products C. Numerous participants D. Perfect information
If expansionary fiscal policy also causes higher interest rates,
a. aggregate demand increases because firms and households are discouraged from borrowing and spending. b. aggregate demand decreases because firms and households are discouraged from borrowing and spending. c. aggregate demand increases because firms and households are encouraged to borrow and spend. d. aggregate demand decreases because firms and households are encouraged to borrow and spend.
When actual investment exceeds intended investment, national income will grow
Indicate whether the statement is true or false
When the price of a good falls, consumers buy more of the good because it is cheaper relative to competing goods. This statement describes the:
A. consumer equilibrium effect. B. price effect. C. income effect. D. substitution effect.