Refer to the given graph. A movement from a to b along C 1 might be caused by a(n):
A. recession.
B. wealth effect of an increase in stock market prices.
C. increase in income tax rates.
D. increase in real GDP.
D. increase in real GDP.
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A key element of real business cycle theory is that
a. labor supply is not responsive to changes in real wages. b. labor supply is highly elastic. c. as the wage increases, workers are richer and work less. d. none of the above.
An appreciation of the U.S. dollar has what impact on Harley-Davidson (HD), a U.S. manufacturer of motorcycles?
a. domestic sales of HD motorcycles increase and foreign sales of HD motorcycles increase b. domestic sales of HD motorcycles decrease and foreign sales of HD motorcycles increase c. domestic sales of HD motorcycles increase and foreign sales of HD motorcycles decrease d. domestic sales of HD motorcycles decrease and foreign sales of HD motorcycles decrease e. only manufacturers who produce traded goods are affected
Which of the following describes an individual’s labor supply curve when the income effect is stronger than the substitution effect?
a. U-shaped b. backward bending c. upward sloping d. downward sloping
Exhibit 6A-5 Consumer Equilibrium
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Given the budget lines and indifference curves shown in Exhibit 6A-5, if the budget line shifts from AB to AC, then the:
A. price of good Y has increased. B. price of good X has decreased. C. price of good X has increased. D. consumer's budget has decreased.