Everything else remaining unchanged, what is likely to happen to the equilibrium real interest rate and quantity of credit if the credit demand curve shifts to the right?
A) Both equilibrium rate of interest and quantity of credit will decrease.
B) The equilibrium rate of interest will decrease and the quantity of credit will increase.
C) Both equilibrium rate of interest and quantity of credit will increase.
D) The equilibrium rate of interest will increase and the quantity of credit will decrease.
C
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Which of the following statements is true?
A) Testing with data is essential to develop a good theory. B) Knowledge of economics complicates decision making. C) Cost-benefit analysis can be applied only to limited economic decisions. D) Economics is more of a theoretical subject with limited applications in the real world.
The drawback to calculating real GDP using base-year prices is that
A) relative prices change over time and these are not reflected in base-year prices, and this distorts GDP. B) quality changes are reflected in base-year prices. C) relative prices change over time and these changes are reflected in base-year prices. D) real GDP in one year is not comparable to real GDP in another year.
If advertising makes demand of a product less elastic, it makes sense for a firm to
a. Decrease the price of the product b. Increase the price of the product c. Leave the price unchanged d. None of the above
The law of diminishing marginal utility holds that at some point consumption of additional units of a commodity adds less to total utility
a. True b. False Indicate whether the statement is true or false