Refer to the information provided in Figure 3.5 below to answer the question(s) that follow.
Figure 3.5Refer to Figure 3.5. If consumer income increases, the demand for chili peppers shifts from D0 to D1. This implies that chili peppers are a(n)
A. normal good.
B. substitute good.
C. complementary good.
D. inferior good.
Answer: D
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Since most people prefer more money to less, the desire for more money
A) makes it difficult to induce people to cooperate. B) makes it difficult to induce people to sacrifice for the larger public good. C) makes social order highly unstable and unpredictable. D) can induce useful changes in behavior. E) implies people are living in a capitalist society.
The _______ tells us how many additional dollars of deposits are created with each additional dollar of reserves.
A. reserve ratio, calculated as 1 divided by the money multiplier, B. money multiplier, calculated as 1 divided by the reserve ratio, C. reserve ratio, calculated as 1 minus the money multiplier, D. money multiplier, calculated as 1 minus the reserve ratio,
The consumption function is the relationship between
A. real consumption spending and real saving. B. real consumption spending and real taxes. C. real consumption spending and investment spending. D. real consumption spending and real disposable income.
What is the government's major problem involved in reaching the optimal level of provision for public goods?
What will be an ideal response?