Fashion trends are a nonprice determinant for demand because
A. they do not affect demand.
B. they change the supply of accessories.
C. they cause a movement along the demand curve.
D. they influence people's tastes and preferences in clothing.
Answer: D
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Fiscal policy involves ________
A) taxes and government spending B) setting interest rates C) controlling the amount of money in the economy D) all of the above E) none of the above
If the government removes a binding price floor from a market, then the price paid by buyers will
A. decrease, and the quantity sold in the market will increase. B. decrease, and the quantity sold in the market will decrease. C. increase, and the quantity sold in the market will decrease. D. increase, and the quantity sold in the market will increase.
When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Which of the following is a valid explanation for rising wages?
A. increases in labor productivity B. reductions in the capital available to workers C. a reduction in the demand for goods produced by labor D. an increase in the supply of labor