Income effect
What will be an ideal response?
has led to a decrease in the quantity demanded or if the price goes down then you would buy more.
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State three major potential advantages of foreign direct investment for a developing country. State three major potential disadvantages
What will be an ideal response?
Which of the following would cause a consumer to purchase less of a good when the price of the good rises?
a. The income effect b. The substitution effect c. Both a and b d. Neither a nor b
Characteristics of the short run include: a. at least one fixed input
b. insufficient time for firms to enter or leave the industry in question. c. the applicability of the law of diminishing marginal product. d. all of the above.
Which of the following is true when the government attempts to move the economy to full employment by increasing spending?
A. The desired stimulus should be set by the multiplier divided by the AD shortfall. B. The total change in spending includes both the new government spending and the subsequent increases in consumer spending. C. It must initially spend more than the GDP gap if the aggregate supply curve is upward-sloping. D. The desired stimulus should be set by the AD shortfall multiplied by the multiplier.