Answer the following questions true (T) or false (F)
1. A normal good is a good for which the demand increases as income decreases, holding everything else constant.
2. The income effect explains why there is an inverse relationship between the price of a normal good and the quantity of the good demanded.
3. If consumers believe the price of iPads will decrease in the future, this will cause the demand for iPads to decrease now.
1. FALSE
2. TRUE
3. TRUE
You might also like to view...
The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
To serve the public interest, government sometimes promotes competition by breaking up natural monopolies
a. True b. False
To be binding, a price floor must be set below the equilibrium price
a. True b. False Indicate whether the statement is true or false
Modern terrorism overturns the central assumption of the Westphalian system that says only
a. democracies can provide a lasting form of power. b. weapons of mass destruction actually maintain peace. c. states have the military force to create serious security threats. d. economic inequality pits private citizens against one another.