If a good is inferior and its price decreases,
a. the income effect will be positive and the substitution effect will be positive.
b. the income effect will be negative and the substitution effect will be negative.
c. the income effect will be positive and the substitution effect will be negative.
d. the income effect will be negative and the substitution effect will be positive.
d
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Refer to Figure 12-1. If the firm is charging a price of $12 per unit
A) it is not selling any output. B) it is selling 700 units. C) it is making a profit. D) it breaks even.
In the 1979-82 period, the Fed pursued a monetary policy which targeted the growth rate of the money supply. Given the effects of financial deregulation on money demand you would expect, ceteris paribus,
A) stable interest rates. B) volatile interest rates. C) a constant interest rate. D) slow growth in interest rates.
The expenditure approach to measuring 2000 GDP adds up all the incomes earned in the production of final goods and services in 2000
Indicate whether the statement is true or false
The rate at which prices in general are increasing is called the:
A. inflation rate. B. standard of living. C. trade balance. D. unemployment rate.