Necessities, such as food and shelter, are product purchases that consumers are sensitive to, so the demand is elastic for these goods.
Answer the following statement true (T) or false (F)
True
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A decrease in business taxes will tend to ________.
A. decrease aggregate demand B. increase aggregate supply C. increase aggregate supply but not change aggregate demand D. increase aggregate demand but not change aggregate supply
For the money expansion process to produce the maximum potential multiplier effect
A. all loans from banks have to be redeposited throughout the banking system. B. the Fed has to sell government bonds to back up the loans. C. all loans of a given bank have to be deposited in that bank. D. the required reserve ratio has to be 100 percent.
The total utility of water is
A. lower than the total utility of diamonds, but the marginal utility is higher. B. the same as the total utility of diamonds, but the marginal utilities are the same. C. lower than the total and marginal utility of diamonds. D. higher than the total utility of diamonds, but the marginal utility of diamonds is higher.
Explain why there is an incentive to cheat in collusive oligopoly. How does such behavior threaten collusive oligopoly over time?
What will be an ideal response?