In the above figure, as Brendan's income falls his consumption bundle moves from point A to point E. This implies that for Brendan, compact discs are ________ good and haircuts are ________ good
A) a normal; an inferior
B) a normal; a normal
C) an inferior; an inferior
D) an inferior; a normal
D
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Fiscal policies that move the economy toward potential GDP without a change in policy are called
A) spending stabilizers. B) economic stabilizers. C) GDP stabilizers. D) routine stabilizers. E) automatic stabilizers.
Refer to the figure above. If A forms a customs union with C, the quantity of trade creation will be
A) 100 units. B) 70 units. C) 30 units. D) None of the above.
Suppose the real interest rate is 4% and the expected inflation rate is 3%. If the money supply increases by 10% and output, the real interest rate, and the expected inflation rate are unchanged, then the price level increases by
A) 3%. B) 4%. C) 7%. D) 10%.
If an artisan sells handmade jewelry at a craft fair
A. and does not report the income earned to the Internal Revenue Service, GDP is understated. B. and does not report the income earned to the Internal Revenue Service, GDP is overstated. C. and reports the income earned to the Internal Revenue Service, GDP is understated. D. and reports the income earned to the Internal Revenue Service, GDP is overstated.