Which of the following statements is FALSE?
A. An increase in income causes the demand curve for an inferior good to shift to the right.
B. An increase in income causes an increase in the demand for a normal good.
C. An increase in income causes a decrease in the demand for an inferior good.
D. A decrease in income causes the demand curve for a normal good to shift to the left.
A. An increase in income causes the demand curve for an inferior good to shift to the right. (When income increases, the demand curve shifts to the left.)
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Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting downward C. Aggregate demand shifting rightward D. Aggregate demand shifting leftward
A woman who decides to drive to work rather than take the bus
A) is wasting scarce resources. B) is behaving inefficiently. C) thinks driving is more economically efficient for her. D) is probably paying attention to personal comfort and convenience rather than economic efficiency.
A central bank's attempt to prevent an appreciation of its currency can stimulate domestic inflation if the ________ of foreign currencies leads to ________ international reserves which ________ the monetary base
A) purchase; higher; increases B) purchase; lower; decreases C) sale; lower; decreases D) sale; higher; increases
Marginal cost is defined as
A. the rate at which fixed cost changes with output. B. the rate at which total variable cost changes with output. C. total cost minus variable cost. D. the rate at which average cost changes with output.