Recent data has shown that income and volunteer time are positively related. Assuming that volunteer time is included in leisure time, what could explain this observation?
A) Higher income individuals view leisure as a normal good such that the income effect dominates the substitution effect.
B) Higher income individuals view leisure as a normal good such that the substitution effect dominates the income effect.
C) Higher income individuals view leisure as an inferior good such that the income and substitution effects both increase leisure time.
D) Both A and C.
A
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The main reason that many businesses fail when the price level is falling is that ________
A) deflation causes a decline in short-run aggregate supply B) as prices fall, businesses are unable to predict the quantity of output they will be able to sell C) the real value of the firms assets declines in proportion to the decrease in the price level D) falling prices mean that regular loan payments become increasingly difficult
Strategic behavior
A) is found in competitive markets. B) is a form of product differentiation. C) involves the interdependence of actions. D) is only present when there are price fixing agreements.
The planning curve is the
A. short-run marginal cost curve. B. production function. C. long-run average cost curve. D. short-run average cost curve.
If the inflation rate is greater than the nominal interest rate, then the
A) real interest rate will be negative. B) real interest rate will be positive. C) inflation rate will increase. D) inflation rate will decrease. E) nominal interest rate will be negative.