If the price of hamburger buns increases, the demand for ground beef is predicted to:
a. Decrease
b. Shift to the right
c. Increase
d. Remain constant
Answer: a. Decrease
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In Figure 4-5 above, at what income would the interest rate that brings about money market equilibrium cause unwanted inventories of commodities to accumulate?
A) YA B) YB C) YE D) YC
The "equilibrating mechanism," the reason the economy tends toward equilibrium in the simple Keynesian model, is primarily
A) autonomous but flexible prices. B) production responses to unplanned inventory changes. C) exogenous inventory changes. D) endogenous price changes.
The drop in unemployment from over 11 percent in 1939 to roughly 1 percent in 1944:
a. has been attributed by Keynesians as a validation of larger deficits as a solution to unemployment. b. has been attributed by Monetarists as a validation that a large increase in the money supply would cure the depression. c. has been acknowledged as a success in Keynesian policies, with the caveat that inflation was only averted through price controls. d. All of the above are correct.
Government programs aimed at stimulating personal savings:
A. increase welfare if people discount the future too heavily. B. decrease economic efficiency if people have impulse control problems. C. help mitigate regression to the mean in most cases. D. are designed to take advantage of the flaws in the availability heuristic.