Assume that Brenda has positive wealth. As the interest rate decreased, Brenda reduced her current consumption. For Brenda
A. the substitution effect of an interest rate decrease outweighs the income effect.
B. the substitution effect of an interest rate increase must be zero.
C. the income effect of an interest rate decrease outweighs the substitution effect.
D. the income effect of an interest rate decrease must equal the substitution effect.
Answer: C
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Each of the following is one of the four main categories of spending identified by John Maynard Keynes except
A) taxes. B) net exports. C) government purchases. D) consumption.
The feature of the rule of law that the text emphasizes is
What will be an ideal response?
In efficient markets, profit opportunities are quickly eliminated as they develop.
Answer the following statement true (T) or false (F)
If a firm can increase its sales only by lowering its price, then
A) the firm is a price searcher. B) the firm's marginal revenue will be less than price. C) the demand curve for the firm's product is negatively sloped. D) all of the above are true.