The substitution effect of a price change refers to
A) the change in quantity demanded that results from a change in price making a good more or less expensive relative to other goods that are substitutes.
B) the shift of a demand curve when the price of a substitute good changes.
C) the movement along the demand curve due to a change in purchasing power brought about by the price change.
D) the shift in the demand curve due to a change in purchasing power brought about by the price change.
Answer: A
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Which researcher argues that the slave system and its enforcement mechanisms prevented slave individualism from emerging within the system itself?
(a) Robert Fogel (b) Stanley Engerman (c) Stanley Elkins (d) Kenneth Stampp
Expansionary fiscal policy can be used to reduce unemployment by
A) increasing long-run aggregate supply so as to raise real GDP. B) increasing aggregate demand so as to raise real GDP. C) reducing nominal wages so as to encourage firms to hire more workers. D) eliminating inefficiencies from labor markets.
Sticky prices are a direct result of the kinked demand curve.
Answer the following statement true (T) or false (F)
The concept of comparative advantage leads to the conclusion that:
A) beneficial trade takes place if one country can produce everything more efficiently than another country. B) trade will benefit the two countries if the relative costs of production differ in the two countries. C) benefits from trade are possible only if all tariffs are eliminated. D) everyone benefits from increased trade both in the short run and the long run.