As price declines, quantity demanded goes _______ and quantity supplied goes ________.
A. up; up
B. down; down
C. up; down
D. down; up
C. up; down
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Investment spending is countercyclical
Indicate whether the statement is true or false
Suppose you recently took a pay cut of 2% at your job. You expect the price level to fall by 3% during this year. What would be the impact on your real wage?
a. The real wage would fall by 3% b. The real wage would rise by 3% c. The real wage would fall by 1% d. The real wage would rise by 1% e. The real wage would be unchanged
Suppose the government reduces marginal income tax rates and increases welfare payments. This policy combination will:
A. increase the incentive to work. B. have no effect on the incentive to work. C. have an ambiguous effect on the incentive to work. D. reduce the incentive to work.
Which of the following criteria would make gold a poor medium of exchange?
A) a supply that would be difficult to control because of the unpredictability of new gold discoveries B) durability so that value is not lost by spoilage C) value relative to its weight so that amounts large enough to be useful in trade can be easily transported D) divisibility because different goods are valued differently