The substitution effect can be measured holding ________ constant
A) income
B) utility
C) the price of one good
D) the price of all goods
B
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
If Sweden exports cell phones to Denmark and Denmark exports butter to Sweden, which of the following would explain this pattern of trade?
A) The opportunity cost of producing butter in Denmark is higher than the opportunity cost of producing butter in Sweden. B) Sweden has a higher opportunity cost of producing cell phones than Denmark, and Denmark has a higher opportunity cost of producing butter. C) Sweden has a lower opportunity cost of producing cell phones than Denmark and Denmark has a comparative advantage in producing butter. D) Sweden must have an absolute advantage in producing cell phones and Denmark must have an absolute advantage in producing butter.
An explanation for the low saving rate in the United States consistent with the precautionary reason for saving includes:
A. highly-developed financial systems making it easy to buy homes with down payments under 15 percent. B. relatively generous government assistance for the elderly and large down payments required for home purchases. C. confidence in future economic prosperity. D. households spending beyond their means to keep up with community standards.
People who often create benefits for the minority and impose the cost on the majority are called:
A. fair-interest groups. B. encounter groups. C. laissez-faire groups. D. special-interest groups.