As the price level falls, buyers require less money for their purchases and the demand for money falls. A decrease in the demand for money will cause business investment to increase. This is called the _____
a. interest rate effect
b. exchange rate effect
c. wealth effect
d. accelerator effect
a
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Refer to Scenario 12.2. Explain why the situation described in the scenario is neither a prisoner's dilemma nor a battle of the sexes
What will be an ideal response?
Many people consider lump-sum taxes to be unfair to low-income taxpayers
a. True b. False Indicate whether the statement is true or false
Fred just purchased an expensive new refrigerator and is considering purchasing the overpriced warranty. In making his decision on the warranty, Fred ignores better ways that his money could be spent, including paying off high-interest credit card debt. According to prospect theory, the process that leads Fred to ignore the debt and buy the overpriced warranty is
A) framing bias. B) anchoring. C) mental accounting. D) confirmation bias.
Pure or economic profit is:
A. the amount by which accounting profits exceed normal profits. B. determined by subtracting explicit costs from total revenue. C. the return required to retain entrepreneurial talent in some particular line of production. D. the return to any resource the supply of which is perfectly inelastic.