Assume that smartphones are a normal good, and that the prices of smartphones have fallen in recent years. Over this same period, the price of the components used to produce smartphones has also fallen and consumer incomes have risen. Which of the
following best explains the falling prices of smartphones?
A) The supply curve for smartphones has shifted to the right while the demand curve for smartphones has shifted to the left.
B) The demand curve for smartphones has shifted to the right more than the supply curve has shifted to the right.
C) The demand curve and the supply curve for smartphones have both shifted to the left.
D) The supply curve for smartphones has shifted to the right more than the demand curve has shifted to the right.
Answer: D
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The steeply upward sloping yield curve in the figure above indicates that ________ interest rates are expected to ________ in the future
A) short-term; rise B) short-term; fall moderately C) short-term; remain unchanged D) long-term; fall moderately
If a British automobile sells for £20,000 and the British pound is worth $1.50, then the dollar price of the automobile is
A) $1.60. B) $12,500. C) $20,000. D) $30,000.
If expected inflation is constant, then when the nominal interest rate increases, the real interest rate
a. increases by more than the change in the nominal interest rate. b. increases by the change in the nominal interest rate. c. decreases by the change in the nominal interest rate. d. decreases by more than the change in the nominal interest rate.
The existence of money leads to
a. greater specialization in production, but not to a higher standard of living. b. a higher standard of living, but not to greater specialization. c. greater specialization and to a higher standard of living. d. neither greater specialization nor to a higher standard of living.