In the market for magazines, the "income effect" means that
A) magazines are usually purchased by people with higher than average incomes.
B) a decrease in the price of a substitute product like books will make magazine readers feel a little poorer than they were before.
C) an increase in the price of magazines will reduce the total purchasing power of magazine readers, making them able to afford fewer magazines.
D) an increase in the price of magazines will raise the relative price of magazines to books, causing magazine readers to read more books and fewer magazines.
C
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Explanations for the low saving rate in the United States consistent with the life-cycle reason for saving include:
A. well developed financial markets making it easy to borrow against home equity. B. relatively limited government assistance for the elderly and large down payments required for home purchases. C. confidence in future economic prosperity. D. households spending beyond their means to keep up with community standards
The tit-for-tat strategy is:
A. one in which a player in a repeated game takes the same action that his or her opponent did in the preceding round. B. one in which both players explicitly agree to compete in the first round of a repeated game, and if one of them cooperates, the other will defect. C. not effective in prisoner's dilemma type games. D. All of these statements are true.
The aggregate demand (AD) curve shifts to the right. This is a result of
A) total expenditures increasing at a given price level. B) total expenditures decreasing at a given price level. C) the real balance effect. D) the interest rate effect E) b and c
As populations age, public spending tends to increase
Indicate whether the statement is true or false