When an economy experiences deflation, consumption will:
A. decrease, because people will want to wait for prices to drop before spending.
B. decrease, because people will lose value in their savings.
C. increase, because people will lose value in their savings.
D. increase, because people will want to wait for prices to drop before spending.
Answer: A
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Demand is price inelastic if ________ percentage change in the price leads to a ________ percentage change in the quantity demanded
A) a small; large B) a large; small C) any; large D) Both answers A and B are correct. E) None of the above answers is correct.
A horizontal aggregate supply curve reflects the assumption that the
A) price level is constant. B) velocity of money is constant. C) saving rate is equal to zero. D) economy is at full employment.
________ refers to the dominant firm's attempt to drive rivals out of business by temporarily setting price below cost or dropping the price only in certain markets
a. Herfindahl pricing b. Per se pricing c. Predatory pricing d. Marginal cost pricing
The process whereby votes are exchanged to gain support for legislation is referred to as
A) logrolling. B) rational ignorance. C) simple majority voting. D) special interest voting. E) a and d