If we say that two variables are inversely related, this means that:
A. the two graph as an upsloping line.
B. an increase in one variable is associated with a decrease in the other.
C. an increase in one variable is associated with an increase in the other.
D. the resulting relationship can be portrayed by a straight line parallel to the horizontal axis.
Answer: B
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The figure above shows the labor market in a small town. If the government imposes ________ that firms must at least pay, the effect will be ________ because ________
A) a minimum wage of $10; an increase in unemployment; a surplus of labor is created B) a minimum wage of $10; no change in unemployment; it will not affect how firms demand labor C) a minimum wage of $10; a decrease in unemployment; a shortage of labor is created D) an efficiency wage of $10; an increase in unemployment; a shortage of labor is created E) an efficiency wage of $10; a decrease in unemployment; a surplus of labor is created
The Fed is concerned that inflation might occur. To help eliminate this possibility, the Fed could ________ government securities to ________ the federal funds rate in the short run
A) buy; raise B) sell; not change C) sell; lower D) buy; lower E) sell; raise
The exchange rate is the price at which the ________ of one country exchanges for the ________ of another country
A) currency; goods B) goods; goods C) currency; currency D) currency; financial instruments
In long-run equilibrium, all firms in a pure competition market situation operating under a condition of certainty will have identical costs even though they may use different production and operation techniques
a. true b. false