The law of demand states that there is a negative relationship between price and quantity demanded, ceteris paribus
Indicate whether the statement is true or false
TRUE
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Suppose the economy is at a short-run equilibrium GDP that lies below potential GDP. Which of the following will occur because of the automatic mechanism adjusting the economy back to potential GDP?
A) Unemployment will rise. B) Prices will increase. C) Output will decrease. D) Short-run aggregate supply will shift to the right.
Which of the following was a country that ran large deficits in the mid-1990s and plunged into deep recession in 1997 and 1998 when foreign investors became concerned about the health of these economies and quickly pulled their money out of stock and bond markets, real estate, and banks?
a. North Korea b. Argentina c. Malaysia d. India
Which of the following could lead to an inward shift of the production possibilities frontier?
a. an increase in the cost of one good b. an increase in the utilization of resources c. a rise in the level of technology d. a law is passed whereby a mandatory retirement age of 60 is imposed e. a decrease in the utilization of resources
The purchase price of capital is
a. the value of the capital to the firm. b. always less than the rental price. c. the price received from the flow of some capital services. d. the price a person pays to own that factor of production indefinitely.