For normal goods, the substitution effect and the income effect work in ________, generating a(n) ________-sloped demand curve.
A. opposite directions; downward
B. the same direction; downward
C. opposite directions; upward
D. the same; upward
Answer: B
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Juanita worked for a defense contractor in the United States. During the 2008 recession, the government cut spending and Juanita and ninety-nine others were laid off. In such a case, the unemployment Juanita is experiencing is _____
a. cyclical b. structural c. seasonal d. frictional e. voluntary
When we say the cost of living has gone down, we mean that, looking broadly over a range of goods and services:
A. a dollar buys less today than it used to buy. B. a dollar buys more today than it used to buy. C. a dollar buys the same today as it used to buy. D. our income has increased to match the cost of those goods.
Fiscal policy moved toward expansion during the 1980s but toward restriction during the 1990s. How did these differences affect the economy?
a. The expansionary fiscal policy of the 1980s led to strong growth while the restrictive policy of the 1990s led to stagnation. b. The expansionary fiscal policy of the 1980s led to weaker growth than the restrictive policy of the 1990s. c. The expansionary fiscal policy of the 1980s generated more rapid growth than the restrictive policy of the 1990s. d. There is little evidence that the differences in fiscal policy between the two decades exerted much impact on either aggregate demand or real output.