The direction of the substitution effect is not influenced by whether the good is normal or inferior
a. True
b. False
Indicate whether the statement is true or false
True
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Hurricane Katrina destroyed oil and natural gas refining capacity in the Gulf of Mexico which subsequently drove up natural gas, gasoline, and heating oil prices
Three years later, once the refining capacity was restored, these prices came back down. The restoration of refining capacity should A) move the economy up along a stationary short-run aggregate supply curve. B) move the economy down along a stationary short-run aggregate supply curve. C) shift the short-run aggregate supply curve to the left. D) shift the short-run aggregate supply curve to the right.
Nontariff barriers
(a) decrease foreign exchange earnings. (b) reduce the quantity of goods exported. (c) lower the effective price received for exports. (d) all of the above.
The amount of assets that a bank must hold at all times is determined by the
a. banks' actual reserves b. legal reserve requirement c. actual reserve requirement d. fractional reserve requirement e. excess reserve requirement
A town engineer comes to the city council with a proposal to install a traffic light at a certain intersection that currently has a stop sign. The benefit of the traffic light is increased safety because the light will reduce the incidence of fatal traffic accidents by 50 percent per year. Which of the following statements is correct?
a. The city council should vote to install the traffic light because the benefits will outweigh the costs. b. The city council should carefully evaluate the benefits of reduced fatalities against only the explicit costs of the light. c. The city council should carefully evaluate the benefits of reduced fatalities against the costs of the light and of the extra time that drivers will spend waiting for a green light. d. The costs will invariably outweigh the benefits.