When it is assumed that people desire a smooth pattern of consumption enjoyment, if not consumption expenditure, this limits the permanent-income and life-cycle hypotheses to predicting the demand for consumer
A) durables.
B) durables and services.
C) services and nondurables.
D) nondurables and durables.
E) nondurables.
C
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When two goods are related such that an increase in the price of one good decreases the quantity demanded of the other good, these goods are definitely
A) normal goods. B) luxury goods. C) complements. D) substitutes. E) inferior goods.
At any point on the LM curve
a. there is labor market equilibrium. b. money supply equals money demand. c. equilibrium output equals potential output. d. both commodity and money market are necessary for equilibrium. e. both b and c.
The multiplier tells us the relationship between
A) the interest rate and the level of investment expenditure. B) the exchange rate and the level of exports. C) the exchange rate and the level of imports. D) a change in autonomous spending and the resulting change in equilibrium real GDP.
Ceteris paribus means
A. other variables are held constant. B. perhaps. C. only if everything works just right. D. almost certainly.