For which pair of goods below would an increase in income have the same effect on both goods?
A. A normal good and a luxury good.
B. A superior good and a normal good.
C. A normal good and an inferior good.
D. An inferior good and a luxury good.
Answer: A
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Which of the following is NOT a positive statement?
A) The unemployment rate is 5.8 percent. B) The inflation rate for 2002 was 2.3 percent. C) The national debt is too high. D) The federal government budget for 2004 is $2.2 trillion.
Which of the following does NOT occur when the price of a good increases?
A. The good becomes more expensive relative to all other goods. C. Consumers shift their purchases away from the more expensive good. D. The consumer is effectively poorer than before the increase in price.
A tall latte in China costs 30 yuan. The same latte in the U.S. costs 4 dollars. If the exchange rate is 6.5 yuan per dollar then, the real exchange rate is
a. .867 so the good is more expensive in the U.S. b. .867 so the good is more expensive in China. c. 1.154 so the god is more expensive in the U.S. d. 1.154 so the good is more expensive in China.
A decrease in the federal funds rate leads to..
What will be an ideal response?