A sustained decrease in the average of all prices of goods and services in the economy is known as
A. deflation.
B. inflation.
C. disinflation.
D. hyperinflation.
Answer: A
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The primary motivation for private foreign investment in developing nations is
A) to eradicate poverty. B) to improve the standard of living for workers. C) the potential for high rates of return. D) to do research in countries with fewer social regulations.
Holding all other factors constant, income earned from capital is more unequally distributed than income earned from labor
Indicate whether the statement is true or false
Suppose a professor gives up her teaching job to devote her time to writing textbooks. If salaries of professors rise,
a. her accounting profit will rise b. her accounting profit will fall c. her explicit costs will rise d. her economic profit from textbooks will fall e. her economic profit from textbooks will rise
Refer to Figure 6.1. Assume that L1 represents the budget line before a price change. The substitution effect is shown by the movement:
A. from bundle A to bundle C.
B. from bundle A to bundle B.
C. from bundle B to bundle C.
D. from bundle C to bundle B.