An increase in which of the following variables will cause a reduction in the demand for domestic goods?
A) foreign income
B) the real exchange rate
C) consumer confidence
D) domestic income
E) all of the above
B
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
Economics is the study of how people make
A) subjective judgments. B) themselves worse off. C) money. D) choices.
An example of a flow variable in economics is: a. the total amount of bank loan taken by Emily
b. the value of an apartment owned by Jerome. c. the price of an antique painting used to decorate an office. d. the earnings of Malaya from piano classes each month. e. the total value of the U.S. treasury bonds held by China.
If firms are required to pay the social costs of a negative externality, they would produce more of the good causing the externality
a. True b. False Indicate whether the statement is true or false