Which of the following is likely to lead to a decrease in the demand for tennis balls?
A. An increase in the price of tennis balls.
B. An increase in the price of tennis racquets.
C. An increase in the expected future price of tennis balls.
D. An increase in the price of the rubber used to make tennis balls.
Answer: B
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Draw a saving—investment diagram to show how each of the following changes shifts the IS curve
(a) Future income rises. (b) The future marginal productivity of capital increases. (c) Government purchases decrease temporarily. (d) The effective corporate tax rate increases.
In foreign exchange markets, demand and supply become closely interrelated, because a person or firm that demands one currency must at the same time _____________ another currency—and vice versa.
a. supply b. create c. demand d. locate
According to economists, how does an increase in the inflation rate affect the consumption function?
A. It shifts the function upward. B. It shifts the function downward. C. It causes movement upward along the function. D. It causes movement downward along the function. E. It has no predictable effect on the function.
Economic growth is a result of
What will be an ideal response?