Which of the following could lead to a rightward shift of the demand curve for a good?
a. a decrease in the price of a substitute good
b. an increase in the price of a complementary good
c. a decrease in the price of the good, assuming it is a normal good
d. an increase in the price of the good, assuming it is an inferior good
e. expectations that the price of the good will rise in the future
E
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Pollution is an example of a negative externality
a. True b. False Indicate whether the statement is true or false
A tax on sellers:
A. shifts the demand curve vertically downwards by the amount of the tax, but does not affect the supply curve B. causes equilibrium price and quantity to decrease. C. causes a shortage in the market. D. shifts the supply curve vertically upwards by the amount of the tax, but does not affect the demand curve.
As long as the aggregate supply curve is upward sloping, an increase in aggregate demand will increase
A. real wealth. B. price levels. C. unemployment. D. net exports.
Suppose current government spending decreases and that individuals expect future government spending to decrease. Given this information, in which of the following cases will output in the current period be more likely to increase?
A) Individuals consider only the short run effects of changes in future macro variables when forming expectations of future output and future interest rates. B) Individuals consider only the medium run effects of changes in future macro variables when forming expectations of future output and future interest rates. C) Individuals consider only the long run effects of changes in future macro variables when forming expectations of future output and future interest rates. D) The output effects will be the same in B and C.