If a 10 percent increase in the price of product X causes the demand for product Y to decrease by 15 percent, then:
A. X and Y are substitutes.
B. X and Y are independent goods.
C. the demand for X is elastic.
D. X and Y are complements.
Answer: D
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Refer to Figure 26-11. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, the Federal Reserve would most likely
A) decrease interest rates. B) not change interest rates. C) decrease the inflation rate. D) increase interest rates.
Which of the following is most likely to happen if the Federal Trade Commission (FTC) wins a suit against alleged violators of antitrust law?
a. The FTC will receive compensation up to three times the damage caused. b. The FTC will not be able to impose substantial penalties. c. The FTC will force firms to break up through dissolution. d. The FTC will force firms to merge together. e. The FTC will file criminal actions that may result in fines but not prison sentences.
Social indifference curves are the same as a Social Welfare Function.
A. True B. False C. Uncertain
If disposable income increases by $100 million, and consumption increases by $90 million, then the marginal propensity to consume is
What will be an ideal response?