When the price of beef rises, consumers switch consumption to substitutes such as chicken and fish, thereby decreasing the demand for beef
Indicate whether the statement is true or false
False. The statement confuses a change in quantity demanded with a shift in demand. When the price rises, consumers find substitute goods to consume, which reduces the quantity demanded, not the demand curve.
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According to the real business cycle model,
A) increases in aggregate demand do not affect GDP. B) increases in aggregate demand lower the price level. C) increases in aggregate demand lower GDP. D) increases in aggregate demand raise GDP.
A movement along a consumption function is caused by a change in
a. households' real assets b. interest rates c. taxation policy d. expectations of price changes e. households' incomes
If prices in the United States fall relative to Japan, then the:
a. Dollar depreciates because U.S. imports from Japan fall, and U.S. exports to Japan rise. b. Yen depreciates because U.S. imports from Japan fall, and U.S. exports to Japan rise. c. Yen depreciates because U.S. imports from Japan fall, and U.S. exports to Japan fall. d. Yen depreciates because U.S. imports from Japan rise, and U.S. exports to Japan fall. e. Change in the value of the dollar or yen is uncertain because exports and imports rise.
Monopolistic competition is characterized by i) efficient scale ii) markup pricing over marginal cost iii) deadweight loss iv) excess capacity
a. i) and ii) only b. ii) and iv) only c. i), ii), and iii) only d. ii), iii), and iv) only