If the income elasticity of demand for corn is 0.5, then as income increases
A) the demand for corn will increase.
B) the demand for corn will decrease.
C) corn will prove to be an inferior good.
D) the supply curve of corn will shift leftward.
A
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If the government increases spending while holding taxes constant, we expect
A) a decrease in real saving as consumers follow suit and also increase borrowing. B) planned real investment spending by businesses to increase. C) an increase in investment spending by businesses too, as they anticipate future economic growth. D) interest rates to rise.
Class stratification refers to a situation in which people are trapped in a particular income rank
Indicate whether the statement is true or false
Full employment in the classical model is maintained by
A. flexible income. B. flexible interest rates. C. flexible prices. D. flexible wage rates.
Initially, a consumer is at an optimum. Then the price of Y increases. Consequently
A) MUX/PX < MUY/PY. B) MUX/PX > MUY/PY. C) MUX/PX = MUY/PY. D) MUX > MUY.