The price of a gallon of gasoline increased from $2.00 to $2.25 while the price of a ride on the city bus increased from 50 cents to 75 cents. The relative price of riding the city bus
A) increased from 0.25 to 0.6.
B) decreased from 4.0 to 3.0.
C) stayed constant at 0.25.
D) stayed constant at 4.0.
Answer: A
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An increase in national income could by caused by which of the following?
A) an increase in gross domestic product B) a decrease in personal income C) an increase in depreciation D) an increase in personal taxes
If there is a surplus
A) fewer producers want to sell the product because it is too scarce. B) consumers will drive up the price further. C) firms will drive up the price to enhance profits. D) the price will decline to the equilibrium level.
Keynesian economists believe that the government should do what during a downturn in the economy?
a. Increase government spending and decrease taxes b. Increase government spending and increase taxes c. Decrease government spending and decrease taxes d. Decrease government spending and increase taxes
Countries that lack well-defined property laws and legal structures:
A. will have much lower transaction costs associated with any level of lending. B. have large secondary financial markets because the primary markets do not exist. C. will not have any financial markets at all. D. will not develop as fast economically as counties with clear property rights and a formal legal system.