What would most likely increase the demand for peanut butter?
What will be an ideal response?
A decrease in the price of jelly, a good that is often used with peanut butter
You might also like to view...
Suppose there is an unusually large crop of apples this year. How might this affect the market for apples?
A. The demand would increase, increasing both equilibrium price and quantity. B. The supply would increase, decreasing equilibrium price and increasing equilibrium quantity. C. The demand would decrease, decreasing both equilibrium price and quantity. D. The supply would decrease, increasing equilibrium price and decreasing equilibrium quantity.
An increase in public works spending is likely to
A. Have no effect on physical capital investment. B. Increase transportation costs and environmental impact. C. Decrease physical capital investment. D. Increase market efficiency.
As discussed in the Case in Point on the size of the fiscal multiplier, a study conducted by John Taylor on the effect of fiscal policy since the year 2000 suggests that
A) the multiplier effect of fiscal policy is much less than that for monetary policy. B) temporary fiscal policy financed through government borrowing implies a multiplier value between 0.8 and 1.5. C) fiscal policy has little effect on the economy and that the multiplier value is effectively zero. D) statistical models are inadequate to determine the multiplier and the multiplier value likely varies based on the state of the economy.
Suppose workers' and firms' expectations of the price level and productivity are accurate. In this case, an increase in productivity will cause which of the following?
A) an increase in both the real wage and the natural rate of unemployment B) a decrease in both the real wage and the natural rate of unemployment C) an increase in the real wage and no change in the natural rate of unemployment D) a decrease in the real wage and an increase in the natural rate of unemployment E) none of the above