If the demand for product R increases as the price of product S increases, then _____
a. consumer preferences for S have increased
b. R and S are not related goods
c. R and S are substitutes
d. R and S are complements
e. R is an inferior good
c
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Expansionary fiscal policy in an open economy has a
A. greater effect than in a closed economy. B. similar effect as in a closed economy. C. smaller effect than in a closed economy. D. greater effect than monetary policy.
Let C = 800 + 0.6y and I = 100. Assume no government or foreign sectors. If investment decreases by 40, the equilibrium output decreases by a total of
A) 800. B) 480. C) 100. D) 25.
If bond prices and interest rates are plotted on a graph, the curve has a positive slope.
Answer the following statement true (T) or false (F)
According to the graph above, a price ceiling in this market would be non-binding if it were set at:
A. $5.
B. $8.
C. $10.
D. $13.