?
Assume that Figure 4-4 shows demand for steak. An increase in income of buyers will change demand from
A. D1to D2.
B. D2to D1.
C. D3to D2.
D. D3to D1.
Answer: A
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If the expected inflation rate was 2.5%, the expected real interest rate was 4.0%, and the actual inflation rate turned out to be 3.2%, then the real interest rate equals
A) 1.7%. B) 3.2%. C) 3.3%. D) 4.7%.
Behavioral economics extends traditional economic models by
A) including insights from psychology and human cognition models. B) modeling behavior rather than prices. C) admitting that individuals are irrational. D) admitting that incentives are very important.
Which of the following total cost functions suggests the presence of a natural monopoly?
A) TC = 2Q B) TC = 100 + 2Q C) TC = 100 + 2Q2 D) All of the above.
The Fed's strategy of increasing the money supply and lowering interest rates in order to increase real GDP is called
A. Contractionary fiscal policy B. Expansionary monetary policy C. Expansionary fiscal policy