If the price of gasoline increases and car dealers experience a decrease in demand for sport utility vehicles, then gasoline and sport utility vehicles are:
a. Substitutes
b. Complements
c. Inferior goods
d. Unrelated goods
Answer: b. Complements
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If the economy is at full employment, then the inflation rate
A) is less than the expected inflation rate. B) is equal to zero. C) can be anywhere on a short-run Phillips curve. D) is equal to the expected inflation rate. E) exceeds the expected inflation rate.
Assume the demand for sugar decreases and the supply of sugar increases. Which of the following outcomes is certain to occur?
A. The equilibrium quantity of sugar will rise. B. The equilibrium price of sugar will fall. C. The equilibrium quantity of sugar will fall. D. The equilibrium price of sugar will rise.
In the base year, real GDP ________ nominal GDP.
A. is equal to B. could be greater than or less than C. is less than D. is greater than
Which one of the following would cause a rightward shift in the demand curve of smartphones?
A. Smartphones become easier to use. B. The price of smartphones decreases. C. Government regulations are imposed to limit the number of smartphones imported. D. Production methods are modified to make production of smartphones more efficient.