As income rises, the demand for inferior goods
A. rises.
B. falls.
C. stays about the same.
D. cannot be determined.
B. falls.
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Refer to Figure 15-12. In the dynamic AD-AS model, if the economy is at point A in year 1 and is expected to go to point B in year 2, the Federal Reserve would most likely
A) increase the inflation rate. B) decrease interest rates. C) not change interest rates. D) increase interest rates.
Imagine that Wingate National is a new bank, and that the legal reserve requirement is 10 percent. If it accepts a $1,000 deposit, then the maximum value of the loans it makes is
a. $0 b. $90 c. $100 d. $900 e. $910
What does "random walk" mean? According to the efficient markets hypothesis, should stock prices follow a random walk?
Suppose that the extra cost to Tim of a third glass of soda is zero because he's at a restaurant that gives free refills. According to the Cost-Benefit Principle Tim should:
A. drink a third glass of soda. B. drink a third glass of soda if his total benefit from drinking soda is positive. C. drink a third glass of soda if the extra benefit of doing so is positive. D. not drink a third glass of soda.