When the price of a product decreases, the purchasing power of our income increases and thus permits consumers to purchase more of the product. This statement describes
A. the income effect.
B. an inferior good.
C. the rationing function of prices.
D. the substitution effect.
Answer: A
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Additional economic growth should be pursued when:
A. scarcity exists. B. new technologies are discovered. C. the marginal costs of growth are less than the marginal benefits. D. the marginal costs of growth exceed the marginal benefits.
Which of the following is NOT statistically correlated with higher economic growth rates?
A) higher rates of private investment spending B) higher rates of government investment spending C) greater political stability D) higher fertility rates E) higher school enrollment rates
If the price of a substitute increases, which of the following is most likely to happen in the market for the product under consideration in the short run?
A) Supply will increase. B) Firms will leave the market. C) Firms will devote more variable inputs in the production of this good. D) Firms will devote less variable inputs in the production of this good.
An increase in autonomous consumption, an increase in disposable income, or a decrease in the marginal propensity to consume can all increase consumption
Indicate whether the statement is true or false