For inferior goods, demand will fall when
A. price increases.
B. price decreases.
C. income decreases.
D. income increases.
Answer: D
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If the demand for a good is highly elastic, that good is likely to have:
A. many close substitutes. B. many close complements. C. few close substitutes. D. few close complements.
Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher
An automatic increase in a wage rate found in some contracts is known as a
A) change of labor agreement. B) cost of labor arrangement. C) cost of living adjustment. D) charge for living amendment.
Suppose Congress increases the corporate profit tax rates. This is an example of
A) discretionary fiscal policy of the expansionary variety. B) automatic fiscal policy of the expansionary variety. C) discretionary fiscal policy of the contractionary variety. D) automatic fiscal policy of the contractionary variety.