Which of the following causes an increase in demand for a normal good?
A) increase in the price of a substitute
B) increase in the price of a complement
C) decrease in price
D) decrease in income
Answer: A
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When decision rights are decentralized, typically
a. decisions are being moved to those with less of the relevant information b. decisions are being moved to those with stronger incentives to make good decisions c. decisions are being moved to those with more of the relevant information d. decisions are being moved from those with weaker incentives to make good decisions
A useful theory must
A. apply to every conceivable situation. B. be broadly applicable. C. be agreed upon by all economists. D. not be able to be refined.
A year-long drought that destroys most of the summer's crops would be considered a:
A. short-run supply shock. B. long-run demand shock. C. long-run supply shock. D. short-run demand shock.
Which of the following statements is true about causes of business cycle fluctuations?
A. Economists all agree that supply shocks are the cause of most business cycle fluctuations. B. Economists all agree that productivity shocks are the cause of most business cycle changes. C. Economists all agree that monetary changes are primarily responsible for business cycle fluctuations. D. There are a wide range of theories as to the underlying causes of business cycle movements.