The income effect measures how
a. the quantity of a good supplied changes in response to a change in income
b. the quantity of a good demanded changes in response to a change in the price of a good, with income constant
c. far the budget line shifts due to a change in income
d. the quantity of a good demanded changes in response to a change in purchasing power
e. income changes when prices change, holding quantities demanded constant
D
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The stricter the enforcement of a price ceiling, the
A) smaller is the difference between the black market price and the legal market price of the good. B) larger is the difference between the black market price and the legal market price of the good. C) greater is the amount of the good available in total, from either the legal market or the black market. D) Both answers B and C are correct.
Which of the following is not an appropriate policy for a central bank to follow if the economy is plagued with deflation?
A) consistently pursuing policy to promote the credibility of the central bank B) explicitly and credibly targeting inflation C) using expansionary monetary policy to drive down interest rates D) increasing the target interest rate on overnight loans
How would the introduction of legal or technical barriers to entry affect the long-run equilibrium in a perfectly competitive market?
What will be an ideal response?
Compared to other countries, the U.S. government is very concerned with intellectual property rights. This can explain, in part, the success of its software, computer and other electronic industries
Indicate whether the statement is true or false