Identify the correct statement.
a. An increase in the price level in an economy will increase the real value of dollar-denominated assets.
b. An increase in the price level in an economy will shift the aggregate expenditure line upward
c. An increase in the price level in an economy will decrease the equilibrium level of output demanded.
d. An increase in the price level in an economy will cause an upward movement along the aggregate demand curve.
e. An increase in the price level in an economy will shift the aggregate demand curve rightward.
d
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What economic conditions are relevant in managerial decision making?
What will be an ideal response?
GDP is a measure of:
a. domestic production. b. changes in the general level of prices. c. material well-being. d. social welfare.
The competitive market process tends to promote economic prosperity because it
a. keeps the prices of goods higher than their production costs. b. creates inefficiencies, which causes people to economize. c. directs self-interested action toward the production of goods that are highly valued relative to their cost. d. sends signals to the government about which goods to produce.
On a vacation to China, you find yourself eating every meal at the local Burger King rather than buying a meal from one of the street vendors. Your traveling companion claims that you are irrational, since you never eat Burger King hamburgers when you are home, and Burger King's hamburgers cost more than the meals prepared and sold by China's street vendors. An economist would most likely explain
your behavior by suggesting that a. your behavior is rational, but your friend's behavior is clearly irrational. b. you are clearly irrational, but your friend's behavior is rational. c. the Burger King brand name suggests consistent quality. d. the advertising by Burger King in China is more persuasive than the advertising by Burger King in your home town.