Which of the following most clearly illustrates the concept of "derived demand"?
a. An increase in the price of steak causes the demand for poultry to increase.
b. An increase in the demand for new houses leads to an increase in the demand for construction workers.
c. An increase in consumer income leads to an increase in the demand for services provided by the government.
d. An increase in the demand for new cars causes the demand for used automobiles to rise.
B
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The monetary base is $1,000 billion and the money multiplier is 5.5. What is the size of the money supply?
What will be an ideal response?
Instead of trying to balance the budget every year, it is easier to:
A. balance the budget over the business cycle. B. allow deficit spending only in times of economic downturn. C. allow surpluses to build during times of economic booms. D. All of these statements are true.
Economists generally define economic growth as an increase in real income per capita
a. True b. False Indicate whether the statement is true or false
To determine the total demand for all consumers, sum the quantity each consumer demands
A) at a given price. B) at all prices and then sum this amount across all consumers. C) Both A and B will generate the same total demand. D) None of the above.