If the quantity of gidgets demanded increases when the price of gadgets decreases
A. gidgets and gadgets are complements.
B. gidgets and gadgets are substitutes.
C. gadgets are normal goods, while gidgets are inferior goods.
D. gidgets are normal goods, while gadgets are inferior goods.
Answer: A
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Forward transactions would be useful to
A) a government wanting to know the size of its future debt. B) a household wanting to reduce its future tax liability. C) a business wanting to know the cost of its funds on future loans. D) a business wanting to expand its operations in overseas markets.
Negative incentives: a. increase benefits or reduce costs
b. increase behaviors. c. decrease benefits or increase costs. d. include both cash subsidies and taxes.
Stable velocity as a contributing factor to successfully using money growth as a stabilizing monetary policy tool, is more important in an environment where:
A. inflation occurs, the problems caused by a variable velocity are just as severe at low levels of inflation as at high levels of inflation. B. inflation is extremely high (e.g., over 100 percent). C. inflation is low (e.g., less than 10 percent). D. there is deflation.
On the graph showing the impact of patent protection on equilibrium price and quantity, when a patent on a drug expires, consumers gain a consumer surplus of approximately area ______.
a. a
b. b
c. bc
d. abc