The notion of interest sensitive consumption would be most readily observed when people buy
A. food.
B. cars.
C. insurance.
D. higher education.
Answer: B
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A decrease in aggregate demand results in a(n) ________ in the ________
A) expansion; long run B) recession; short run C) expansion; short run D) recession; long run
The idea that having ownership of an item increases the value that a person puts on the item can be explained by
a. The endowment effect b. Loss aversion c. Overconfident bias d. Anchoring bias
If the Fed decides to use an open market operation to reduce the money supply by $1 million, and if the money multiplier is 10, then what total amount of Treasury securities must the Fed initially sell?
a. $10,000,000. b. $1,000,000. c. $100,000. d. $10,000.
For most goods, purchases tend to rise with increases in buyers' incomes and to fall with decreases in buyers' incomes. Such goods are known as:
A) inferior goods. B) direct goods. C) normal goods. D) luxury goods.