Max is shopping for a new winter jacket. The salesperson explains that two coats have identical features-the Columbia jacket that costs $120, and the Burton jacket that costs $300. Max buys the Burton jacket. Burton jackets may be a good example of:
A. an inferior good.
B. a Giffen good.
C. a Veblen good.
D. a normal good.
Answer: C
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Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________, 
A. Rising; B; C B. Falling; A; C C. Falling; A; B D. Rising; A; C
Two goods are considered substitutes only if a(n):
a. decrease in the demand for one leads to a decrease in the supply of the other. b. increase in the demand for one leads to a decrease in the supply of the other. c. increase in the price of one leads to an increase in the demand for the other. d. decrease in the price of one leads to an increase in the demand for the other. e. decrease in the supply of one leads producers to switch to production of the other.
Which of the following is not true about government taxation?
a. It is an indirect way to shift resources. b. It is free of opportunity costs. c. Taxes are levied on both citizens and businesses. d. Taxes are unequally levied among citizens. e. Taxes are a tool for debt reduction.
Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and the nominal value of the domestic currency in the context of the
Three-Sector-Model? a. The GDP Price Index rises, and nominal value of the domestic currency falls. b. The GDP Price Index falls, and nominal value of the domestic currency rises. c. The GDP Price Index falls, and nominal value of the domestic currency falls. d. There is not enough information to determine what happens to these two macroeconomic variables. e. The GDP Price Index rises, and nominal value of the domestic currency remains the same.