Answer the following questions true (T) or false (F)
1. The income effect results in consumers increasing the quantity of normal goods demanded when the price falls.
2. The demand curve for a Giffen good slopes upward.
3. The only Giffen goods that have been identified so far in the real world are luxury goods.
1. TRUE
2. TRUE
3. FALSE
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While moving along a production possibilities frontier, the amount of labor ________, the amount of capital ________, and the level of technology ________
A) varies; varies; varies B) varies; is fixed; is fixed C) is fixed; is fixed; is fixed D) is fixed; is fixed; varies E) varies; is fixed; varies
Which of the following CORRECTLY characterize principals and agents in important examples of the principal-agent problem?
A) In the doctor/patient relationship, the patient is the principal and the doctor is the agent. B) In the lawyer/client relationship, the client is the principal and the lawyer is the agent. C) Both of the above answers are correct. D) Neither of the above answers is correct.
The __________ the nonsystematic risk of a portfolio, the __________ the risk premium will be
A) higher; lower B) higher; higher C) lower; lower D) None of the above.
Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real GDP and net nonreserve-related borrowing/investing in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. Real GDP remains the same and net nonreserve-related borrowing/investing becomes more negative (or less positive). b. Real GDP rises and net nonreserve-related borrowing/investing becomes more negative (or less positive). c. Real GDP falls and net nonreserve-related borrowing/investing becomes more positive (or less negative). d. Real GDP and net nonreserve-related borrowing/investing remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.