An opinion based on personal preferences and value judgments is called
a. an objective concept.
b. a subjective concept.
c. an unintended consequence.
d. ceteris paribus.
B
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Steve went to his favorite hamburger restaurant with $3, expecting to buy a $2 hamburger and a $1 soda. When he arrived, he discovered that hamburgers were on sale for $1 each, so Steve bought two hamburgers and a soda. Steve's response to the decrease in the price of hamburgers is best explained by
A. the price effect. B. a rightward shift in the demand curve for hamburgers. C. the substitution effect. D. the income effect.
Refer to Table 12-1. The firm will not produce in the short run if the output price falls below
A) $8. B) $4. C) $3.20. D) $2.80.
When the Fed supplies the banking system with an extra dollar of reserves, deposits increase by more than one dollar—a process called
A) extra deposit creation. B) multiple deposit creation. C) expansionary deposit creation. D) stimulative deposit creation.
In the classical model, how do shifts in aggregate demand affect real GDP?
A) Real GDP will remain unchanged. B) Increases in aggregate demand increase real GDP. C) Increases in aggregate demand decrease real GDP. D) Decreases in aggregate demand increase real GDP.