Suppose an individual experiences a permanent increase in income. As a result of this increased income, further assume that the individual eats dinner at restaurants more frequently each month. This information suggests that dinners at restaurants for this individual are
A. a substitute good.
B. an inferior good.
C. a normal good.
D. both complimentary and inferior.
Answer: C
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Why will it difficult for the Fed to use monetary policy to direct the economy back to full employment and price stability from the recession of 2008-2009?
What will be an ideal response?
An increase in demand is shown graphically by a:
a. Shift of the demand curve to the right b. Movement down the existing curve c. Shift of the demand curve to the left d. Movement up along the existing curve
If the marginal propensity to consume (MPC) is 0.96, the value of the spending multiplier is:
A. 25. B. 40. C. 96. D. 100.
Which of the following is NOT a service?
A. physical labor purchased by a producer B. things purchased by a consumer that do not have physical characteristics C. tasks performed by someone else D. a diamond used in an engagement ring