If an increase in the price of good X leads to a decrease in the demand for good Y, then:
A. good X and good Y are substitutes.
B. good X and good Y are normal goods.
C. good X and good Y are complements.
D. good X is a normal good and good Y is an inferior good.
Answer: C
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A movement up along a supply curve indicates:
a. a rise in supply. b. an increase in the quantity supplied. c. an increase in the sales tax on a good. d. a reaction by suppliers to a decrease in demand.
Ignoring any supply-side effects, to close a recessionary gap of $100 billion with a government expenditure multiplier of 5, the government could
A) increase government expenditure on goods and services by $100 billion. B) raise taxes by $100 billion. C) increase government expenditure on goods and services by $20 billion. D) raise taxes by more than $20 billion. E) decrease government expenditure on goods and services by $20 billion.
Country A has real GDP per person of 250,000 while Country B has real GDP per person of 500,000 . All else constant, Country A will eventually have a higher standard of living than Country B if
a. the level of saving per person is 5.000 in Country A and 7,500 in Country B. b. the level of saving per person is 3,000 in Country A and 6,000 in Country B. c. Both of the above are correct. d. None of the above are correct.
Which of the following decrease if the U.S. imposes an import quota on computer components?
a. U.S. exports and U.S. imports b. U.S. exports but not U.S. imports c. U.S. imports but not U.S. exports d. neither U.S. exports nor U.S. imports