An inferior good has an income elasticity coefficient that is greater than zero but less than one.
Answer the following statement true (T) or false (F)
False
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For a large country, replacing imports with domestic goods can result in
A. a more efficient allocation of resources based on comparative advantage. B. improvement in the country's terms of trade. C. a decrease in the price of its exports. D. an increase in the world price of its imports.
The real-nominal principle states that:
A. people respond more to explicit, or real, costs than to implicit costs. B. people respond more to implicit costs than to explicit costs. C. what matters to people is the face value of money or income. D. what matters to people is the purchasing power of money or income.
An advantage offered by pollution taxes that is not offered by command-and-control policies is that:
A. under pollution taxes, pollution is usually reduced to zero. B. a pollution tax decreases the price of the polluting good. C. under pollution taxes, the government receives tax revenues that may be used to clean up pollution. D. pollution taxes decrease the demand for the good generating the pollution.
Which of the following individuals first discovered the relationship between unemployment and inflation?
A) Solow B) Samuelson C) Friedman D) Phillips