_____ a cornerstone of the market economy
a. Mutually beneficial exchange is
b. A strong central bank
c. Monopoly rents are
d. Government regulation is
a
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When the price of a normal good falls, the substitution effect leads to ________ in the quantity purchased and the income effect leads to ________ in the quantity purchased
A) an increase; an increase B) an increase; a decrease C) a decrease; an increase D) a decrease; a decrease
Firms use advertising to
a. standardize their products b. differentiate their products c. decrease market prices d. reduce total cost e. avoid antitrust penalties
In terms of the Phillips curve, the experience of the 1970s indicates that macro-policy
a. can permanently reduce unemployment if we are willing to tolerate higher inflation. b. can reduce unemployment in the long run if we are willing to tolerate higher inflation. c. may be able to reduce unemployment but cannot retard inflation. d. may be able to reduce unemployment in the short run, but there is little evidence that expansionary policies can reduce unemployment permanently.
An increase in the interest rate causes a decrease in the future value of $1,000 that you have in a bank account today
a. True b. False Indicate whether the statement is true or false