An expected future increase in the price of gasoline may
A) increase the demand for gasoline now.
B) decrease the demand for gasoline now.
C) increase the supply of gasoline now.
D) make gasoline an inferior good.
A
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An increase in taxes
a. reduces income by more than the total fall in consumption. b. reduces income by the same amount as the total fall in consumption. c. reduces income and consumption by the same amount as taxes fall. d. reduces income by the amount of the initial fall in consumption.
The Secretary of Labor states that wage rates in the country have risen by 2 percent this past year. The head of a local labor union states that wage gains should have been higher. The Secretary's statement is a(n) ____ economic statement, and the labor head's statement is a(n) ____ economic statement
a. normative; normative b. normative; positive c. positive; normative d. positive; positive e. proper; improper
Which of the following examples, ceteris paribus, best describes the situation shown?
a. Output is permanently changed as a result of the increase in input prices.
b. Input prices are both temporarily and permanently increased.
c. There are no permanent changes in input supply associated with the increase in input prices.
d. The increase in input prices is accompanied by an increase in the labor force.
You are the liaison between the Federal Reserve Board and the U.S. Treasury Department. Your goal is to coordinate policy efforts to achieve full-employment output in the economy while keeping a fixed real interest rate. You must recommend tightening or easing both monetary and fiscal policies to do this. What would your recommendation be in each of the following situations?(a)People decide to increase saving.(b)Expected inflation declines.(c)The future marginal productivity of capital declines.(d)There's an adverse oil price shock in which the LM curve moves farther to the left than does the FE line.
What will be an ideal response?