According to the law of demand, other things equal, when the price of a good or service falls, demand increases
a. True
b. False
Indicate whether the statement is true or false
False
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Land on both sides of the border of Brazil and Venezuela has long been occupied by the Yanomamo people. These "fierce people" are the last Stone Age tribe left in South America. Following discovery of gold, approximately 45,000 garimperios (gold miners) invaded the Yanomamo territory. The mining process pollutes the rivers and scares away game, so traditional Yanomamo sources of food, are almost
impossible to find now. The Yanomamo are starving. Economists call this problem a. the cost disease. b. an externality. c. specialization. d. rent seeking.
Tampering with the price mechanism
a. can be efficient for a while. b. cannot be attempted in a market economy. c. can enhance societal welfare if done properly. d. often produces undesired side effects.
The Monetary Control Act of 1980 extended the Fed's authority to:
a. control the discount rate. b. impose required-reserve ratios on all depository institutions. c. All of the answers are correct. d. control the federal funds rate.
Describe in words why the consumer price index overestimates inflation.
What will be an ideal response?