A decrease in the price of DVD players leads consumers to buy more DVD players. From this information we can conclude that DVD players
a. are normal goods.
b. are inferior goods.
c. are luxury goods.
d. could be any of the above.
d
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Suppose you have spent your entire budget and for all the goods you purchase the marginal utilities per dollar spent are identical. Which of the following is true?
a. You are being irrational. b. You can increase your utility by reallocating your income. c. You will reduce your utility if you allocate income in any other way. d. You are minimizing your marginal utility. e. You can avoid diminishing marginal utility.
If there is currently an inflationary gap: a. The price level will tend to rise. b. Real output will tend to rise
c. Both a. and b. will occur. d. None of the above will occur.
If a greater portion of income is distributed to those in the highest income quintile, the
A. Gini coefficient is less than zero. B. Lorenz curve sags below the diagonal line of absolute equality. C. Lorenz curve is a straight line. D. Line of equality sags below the Lorenz curve.
Under a fixed exchange rate regime, an expansionary fiscal policy would ____ interest rates and GDP, which would cause ____ pressure on the exchange rate, forcing the monetary authority to undertake a(n) ______ monetary policy.
A) raise; downward (appreciation); expansionary B) lower; upward (depreciation); contractionary C) raise; upward (depreciation); contractionary D) lower; downward (appreciation); expansionary