The cross elasticity between two goods, X and Y, is positive. From this, we can conclude that goods X and Y are:
A. substitute goods.
B. complementary goods.
C. unrelated goods.
D. inferior goods.
Answer: A
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The amount by which aggregate expenditures exceed those associated with the full-employment level of domestic output can best be described as
A. the multiplier. B. a recessionary expenditure gap. C. the average propensity to save. D. an inflationary expenditure gap.
Why did India's economic growth rate lag far behind growth rates in South Korea, Japan, and Taiwan between 1960 and 1999?
A) Indian households saved too much and spent too little. B) Indian government officials opened the nation up to free international trade. C) India engaged in central economic planning. D) India has too small of a population to generate a highly specialized division of labor.
A New York legislator wanted to create a deposit on cigarettes butts. If implemented, people would have the incentive to (1) not toss cigarette butts onto public streets and sidewalks, and (2) pick butts up to redeem them for the cash. The degradation of the environment from littered cigarette butts is a
a. private goods problem. b. Nash equilibrium. c. Tragedy of the Commons. d. cost-benefit equilibrium.
Economists have found that entrepreneurs are likely to have subjective beliefs about the probability of entrepreneurial success that are higher than the actual objective probabilities. These beliefs are most closely related to which of the following behavior concepts?
a. People are overconfident b. People give too much weight to a small number of vivid observations. c. People are reluctant to change their minds. d. People are inconsistent over time.