Suppose that the quantity of hamburgers is measured along the vertical axis and that the quantity of popcorn is measured along the horizontal axis. The vertical intercept is 10 hamburgers, and the slope of the budget line is -2. If the price of popcorn
falls from $1 to $0.50, then we know that
A) the vertical intercept shifts to 20 hamburgers.
B) the vertical intercept shifts to 5 hamburgers.
C) the horizontal intercept shifts to 10 bags of popcorn.
D) the horizontal intercept shifts to 20 bags of popcorn.
Answer: C
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The long-run aggregate supply curve is horizontal
Indicate whether the statement is true or false
Which of the following occurrences would NOT shift the demand curve for U.S. dollars in the foreign exchange market?
A) an increase in the U.S. exchange rate B) an increase in the expected future U.S. exchange rate C) an increase in U.S. interest rates D) an increase in foreign interest rates
For inflation to have no real effect on the economy, leaving all decisions and their real outcomes unchanged, five conditions must be met. Which of the following incorrectly states one of those conditions?
A) Inflation is universally and accurately anticipated. B) All savings and money earn the nominal interest rate. C) Inflation of p0 percent lowers the nominal interest rate by p0 below the no-inflation nominal rate. D) Only real interest income is taxable and only the real cost of borrowing is tax-deductible. E) Inflation raises the prices of all goods by the same percentage.
From the "economic perspective," people make purposeful decisions based on hypotheses.
Answer the following statement true (T) or false (F)