________ is an income measured in terms of the goods and services it can buy; real income changes when the price changes?
a) law of demand
b) real income
Ans: b) real income
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What determines how much labor a household will supply?
What will be an ideal response?
When consumption of a good or service produces benefits or costs that are not reflected in the market price for the good, this is known as a(n)
a. externality b. common pool problem c. nonexcludable resource d. public good e. renewable resource
John Maynard Keynes believed the ideas of economists to be
a. generally incorrect. b. powerful. c. academic and without practical application. d. rantings of madmen.
If the price index was 90 in year 1, 100 in year 2, and 95 in year 3, then the economy experienced
a. 10 percent inflation between years 1 and 2 ,and 5 percent inflation between years 2 and 3. b. 10 percent inflation between years 1 and 2, and 5 percent deflation between years 2 and 3. c. 11.1 percent inflation between years 1 and 2, and 5 percent inflation between years 2 and 3. d. 11.1 percent inflation between years 1 and 2, and 5 percent deflation between years 2 and 3.