Which of the following descriptions best depicts the substitution effect?
a. the change in consumption resulting from a change in the consumer's income, holding the prices of the goods constant
b. the change in consumption resulting from a change in the consumer's income, holding the consumer's level of satisfaction constant
c. the change in consumption resulting from a change in the price of one good, holding the consumer's level of satisfaction constant
d. the change in consumption resulting from a change in the price of one good, allowing the consumer's level of satisfaction to change
c
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
The American manufacturing system began to emerge in the years prior to the Civil War. Which of the following was not an important aspect of the system?
(a) Extensive or increased use of craftsmen (b) Mass production of goods in factories (c) The production of standardized goods (d) Extensive use of machinery and equipment
The average National Basketball Association player is over 6 feet tall. The average horse jockey is shorter than 5 1/2 feet tall. This is because height provides NBA players with:
a. d and e. b. an absolute advantage for horse racing. c. an absolute disadvantage for other sports in general. d. a comparative disadvantage in horse racing. e. a comparative advantage in basketball.
Economic progress is best measured by
a. the growth rate of prices over time. b. the growth rate of GDP per capita c. the amount of time it takes a worker to work to afford certain goods and services. d. the growth rate in the population.