When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand
B. increase; raise; decline
C. decline; lower; decline
D. decline; raise; decline
Answer: B
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A downward sloping income-demand curve indicates that the good is a necessity.
Answer the following statement true (T) or false (F)
Which of the following statement(s) best describes trade-offs?
a. The trade-offs in many production possibilities frontiers are represented by a straight line because the law of diminishing returns holds that as resources are added to an area, the marginal gains tend to diminish. b. The trade-offs in many production possibilities frontiers are represented by a curved line because the law of diminishing returns holds that as resources are added to an area, the marginal gains tend to increase. c. The trade-offs in many production possibilities frontiers are represented by a straight line because the law of diminishing returns holds that as resources are added to an area, the marginal gains tend to increase. d. The trade-offs in many production possibilities frontiers are represented by a curved line because the law of diminishing returns holds that as resources are added to an area, the marginal gains tend to diminish.
List and briefly describe the three key reasons for income inequality in a market-based economy.
What will be an ideal response?
If tourists are charged a much higher price than the natives of a country for exactly the same item, what kind of pricing is involved?
A. Competitive pricing. B. MC = MR pricing. C. Monopoly pricing. D. Price discrimination.