Which of the following would not lead to a change in demand for coffee?
a. a change in the price of coffee
b. a change in consumer preferences for coffee
c. a change in the price of tea
d. a change in consumers’ disposable incomes
a. a change in the price of coffee
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You are trying to decide whether to purchase the latest Harry Potter book online or borrow it from the library. There is no charge for borrowing a book from the library, but going to the library takes more time than ordering a book online. Regardless of how you get the book, its benefit to you is the same. If the cost of buying the book online is $13, then you should:
A. borrow the book from the library because you can get it from the library for free. B. borrow the book from the library if the cost of doing so (in terms of the extra time it takes) is less than $13. C. buy the book online because it takes less time. D. borrow the book from the library if the cost of doing so (in terms of the extra time it takes) is greater than $13.
Neutral taxation is taxing different commodities at the same tax rate.
A. True B. False C. Uncertain
Believers in fixed rules maintain that
A. with accurate forecasts, we can see inflation coming at least one year ahead of time. B. the length of stabilization lags is not important because fiscal policy actions are taken quickly and the economy feels the effect on aggregate demand quickly. C. we should forget about discretionary policy and put the economy on autopilot, relying instead on automatic stabilizers and the economy’s self-correcting mechanism. D. the economy’s self-correcting mechanism is slow and not very reliable, even with automatic stabilizers.
Reserves demanded varies
a. inversely with both prices and output. b. inversely with prices and directly with output. c. directly with prices and inversely with output. d. directly with both prices and output.