An increase in demand could be caused by
a. a decrease in price
b. a decrease in income, assuming the good is inferior.
c. buyers expecting the price of the good to fall in the near future.
d. an increase in the price of a complement.
Answer: b. a decrease in income, assuming the good is inferior.
You might also like to view...
Suppose the intersection of the IS and LM curves is to the right of the FE line. What would most likely eliminate a disequilibrium among the asset, labor, and goods markets?
A) A rise in the price level, shifting the LM curve up and to the left. B) A fall in the price level, shifting the LM curve down and to the right. C) A rise in the price level, shifting the IS curve up and to the right. D) A fall in the price level, shifting the IS curve down and to the left.
An example of a final good is:
A. chocolate chips purchased by Nabisco to make Keebler chocolate chip cookies. B. chocolate chips purchased by you to make chocolate chip cookies. C. chocolate chips purchased by a restaurant to make a chocolate chip cookie pie to sell. D. chocolate used to make Cocoa Rice Krispies.
A family on a trip budgets $800 for sit-down restaurant meals and fast food. The family can buy 16 restaurant meals if they don't buy any fast food. What is the price of a restaurant meal for the family?
a. $5 b. $16 c. $20 d. $50 e. it is impossible to tell from the information given
Aggregate demand determines output in the short run if prices are flexible.
Answer the following statement true (T) or false (F)