The only variable that can affect a movement along the demand curve is
A. the number of substitutes.
B. income levels.
C. the price of the good itself.
D. the number of buyers.
Answer: C
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Which of the following is assumed when constructing a production possibilities curve?
A) a fixed amount of resources B) the efficient use of resources C) resources of a given quality D) All of the above are correct.
Assume that during the last several years, the annual rate of inflation was 4 percent and the annual growth rate of the money supply was 5 percent. During the last 12 months, however, the monetary authorities have increased the money supply at a 12 percent annual rate. The expected inflation rate for the next period will be
a. higher than 4 percent under the rational expectations hypothesis. b. 4 percent under the adaptive expectations hypothesis. c. higher than 4 percent under both the adaptive and rational expectations hypotheses. d. both a and b.
If an international currency speculator expects that country A will soon be forced to devalue its currency, the speculator will
A) buy as much of that currency as possible. B) sell all of his holdings of that currency. C) not be concerned because the devaluation will affect only the domestic prices of goods within country A's borders, not international prices. D) not be concerned because only a revaluation will affect his or her profits.
A ________ demand curve for shampoo would be caused by a change in the price of shampoo.
A) positively sloped B) leftward shift of the C) rightward shift of the D) movement along the