If the price of a resource falls, other things constant,
a. demand for the product it produces will increase
b. demand for a substitute product will increase
c. demand for a substitute resource will fall
d. supply of that resource will rise
e. supply of a substitute resource will also rise
C
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If, in an economy, a $200 billion increase in consumption spending creates $200 billion of new income in the first round of the multiplier process and $160 billion in the second round, the marginal propensity to consume and the multiplier are, respectively
A. 0.8 and 5.0. B. 0.2 and 1.25. C. 0.4 and 2.5. D. 0.4 and 1.67.
What is the total revenue test?
What will be an ideal response?
Suppose the private bond rating agencies ceased to exist. What would be the impact on the bond market?
What will be an ideal response?
The graph shown best represents:
A. a binding price ceiling.
B. a binding price floor.
C. a missing market.
D. a market for an inferior good.