Which of the following statements best illustrates the concept of derived demand?
A. When the price of gasoline goes up, the demand for motor oil will decline.
B. As income goes up, the demand for farm products will increase by a smaller relative amount.
C. A decline in the price of margarine will reduce the demand for butter.
D. A decline in the demand for shoes will cause the demand for leather to decline.
Answer: D
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The marginal revenue product schedule is
A. the firm's resource demand schedule. B. the firm's resource supply schedule. C. the same whether the firm is selling in a purely competitive or imperfectly competitive market. D. upsloping.
A new bank has reserves of $600,000, checkable deposits of $500,000, and government securities of $100,000. If the desired reserve ratio is 10 percent, the amount of loans this bank can make is
A) $60,000. B) $550,000. C) $50,000. D) $600,000. E) $540,000.
Your younger brother likes to yell at the dinner table so the rest of the family will give him what he wants. Assume that this has proved quite successful for him time and again
Let's say that you are from a family of eight and every member of your family starts to adopt the same strategy. Would this work? Why or why not? Explain.
Does expansionary fiscal policy directly increase the money supply? Isn't it true that the president and Congress fight recessions by spending more money?
What will be an ideal response?