What economic insight is demonstrated through changing fashions in hairstyles or clothing?
a. Production improvements lead to more goods.
b. New wants develop and replace the old ones.
c. Goods are desirable but limited in supply.
d. Intangible goods cost more than tangible ones.
b. New wants develop and replace the old ones.
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When there is no Ricardo-Barro effect, a government budget surplus ________ the real interest rate because the ________ loanable funds increases
A) lowers; supply of B) lowers; demand for C) raises; supply of D) raises; demand for E) None of the above answers is correct because the real interest rate does not change.
If the market for Twinkies is in equilibrium, then
A) Twinkies must be a normal good. B) producers would like to sell more at the current price. C) consumers would like to buy more at the current price. D) the quantity supplied equals the quantity demanded.
The above figures show the market for gasoline. Which figure shows the effect of an increased preference for cars that are smaller and more fuel efficient?
A) Figure A B) Figure B C) Figure C D) Figure D
Other things equal, when Europeans want to buy more grains from the United States:
a. U.S. imports will increase. b. European exports will increase at every level of domestic income. c. U.S. exports will increase at every level of domestic income. d. the U.S. balance of payments will show a deficit. e. U.S. consumption spending will fall.