When the price of a good that a person is consuming falls, other things being constant, there is
A) a decline in real income.
B) a decline in purchasing power.
C) a real income effect.
D) no change in purchasing power.
Answer: C
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A one-year Treasury bill that sells for $952.38 and has a face value of $1,000 has an annual yield of
A) 10 percent. B) 8 percent. C) 6 percent. D) 5 percent.
In the Santa Rita mines in Arizona in 1870, Mexican miners received about $12 per month while "American" miners received $70 . Although the wages of both groups tended to rise over time, the gap persisted until at least 1910 . Mexican and American miners did the same work and were equally productive. Economists call this pay differential: a. prejudicial differentials
b. compensating differentials. c. wage discrimination. d. job entry discrimination.
The quantity of U.S. bonds foreigners want to buy is taken into account
a. in the U.S. supply of loanable funds and the supply of dollars in the market for foreign-currency exchange. b. in the U.S. supply of loanable funds and the demand for dollars in the market for foreign-currency exchange. c. in the U.S. demand for loanable funds and the supply of dollars in the market for foreign-currency exchange. d. in the U.S. demand for loanable funds and the demand for dollars in the market for foreign-currency exchange.
Can the U.S. dollar and the European euro both appreciate relative to each other?
A. Yes, both countries can gain in this manner. B. Yes, provided the central banks permit it. C. No, unless there is a system of fixed exchange rates. D. No, if one currency appreciates, the other must depreciate.