The ________ effect of a price change states that when the price of a good falls, that good becomes cheaper compared to other goods and services so consumers tend substitute that good for other goods
a. Substitution
b. Demand
c. Income
d. Supply
a
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Which of the following could cause the supply curve of loanable funds to shift to the left?
a. decrease in productivity b. increase in the rate of interest c. decrease in the rate of interest d. increase in productivity e. expectation that future prices will increase
The purchasing power parity theory predicts that changes in the relative price levels of two countries will affect the exchange rate in such a way that
A) one unit of a nation's currency will buy more foreign goods than it did before the change in the relative price levels. B) one unit of a nation's currency will buy fewer foreign goods than it did before the change in the relative price levels. C) one unit of a nation's currency will continue to buy the same amount of foreign goods as it did before the change in the relative price levels. D) the percentage of depreciation in one currency equals the percentage of appreciation in the other currency.
Recall the Application about the harmattan and how it affects the price of cocoa to answer the following question(s).According to this Application, the dry dust wind known as the harmattan has caused ________ of cocoa pods.
A. a decrease in the supply B. an increase in the supply C. an increase in the demand D. a decrease in the demand
The downward slope of the aggregate demand curve shows that
A. an increase in aggregate demand reduces the long-run aggregate supply. B. a higher price level will cause planned purchase rates for final goods and services to be higher. C. a lower price level will cause planned purchase rates for final goods and services to be higher. D. an increase in aggregate demand increases the long-run aggregate supply.