In the above figure, income is $8, the price of a soft drink is $1, and the initial price of a milkshake is $2. If the price of a milkshake decreases to $1, milkshakes are revealed to be
A) an inferior good.
B) a normal good.
C) less preferred than soft drinks.
D) None of the above answers is correct.
B
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The purchasing power parity theory is a reasonably good explanation for nominal exchange rate determination:
A. in the short run. B. in the long run. C. when there are fixed exchange rates. D. when there are significant volumes of non-traded goods and services.
An expansionary monetary policy may be less effective than a restrictive monetary policy because
What will be an ideal response?
Refer to the diagrams. Assume that only wheat can be grown on the three grades of land shown in Figures (a), (b), and (c). Also assume that identical amounts of labor, capital, and other needed inputs are used in farming each grade of land. On the basis of these three figures, we:
A. can say that the land in Figure (a) is most productive.
B. can say that the land in Figure (b) is most productive.
C. can say that the land in Figure (c) is most productive.
D. cannot compare the productivity of the three grades of land.
Which of the following would help reduce the future burden of the U.S. Public Debt?
A) worldwide demand for buying and holding U.S. debt decreases B) the Fed creates enough new currency to buy all of it back C) the eligibility for and size of Social Security benefits is reduced D) the working age population decreases