If an increase in the interest rate raises savings, then
a. the substitution effect is greater than the income effect.
b. the income effect is greater than the substitution effect.
c. the income effect and the substitution effect move in the same direction.
d. we are unable to determine the sizes of the income and substitution effects without more information.
a
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Relative scarcities are indicated by
A) supply and demand being out of equilibrium. B) surpluses. C) excess demand and excess supply. D) relative prices.
The quantity measure in the aggregate demand relationship is the:
A. total quantity of goods and services demanded in the economy. B. total quantity of goods and services supplied in the economy. C. market value of the total quantity of goods and services demanded in the economy. D. market value of the total quantity of goods and services supplied in the economy.
________ is an income measured in terms of the goods and services it can buy; real income changes when the price changes?
a) Law demand b) Real income
________ is considered to be the least mobile factor internationally.
A. Labor B. Land C. Capital D. Entrepreneurship