If rice is an inferior good,
a. the income elasticity of demand for rice will be positive.
b. an increase in income will cause the demand curve for rice to shift to the left.
c. an increase in income will cause consumers to buy more rice at the current market price.
d. a reduction in income would not affect the demand for rice, but it would increase the quantity demanded.
B
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
Covered interest arbitrage ensures
A) exchange parity. B) purchasing power parity. C) interest parity. D) All of the above.
In the winter of 2001-2002, Argentina's overvalued currency reflected a(n)
a. balance of payments surplus. b. balance of payments deficit. c. surplus of exports over imports. d. excess demand for Thai currency.
Which of the following both shift aggregate-demand curve to the right?
a) a decrease in taxes and at a given price level consumers feel more wealthy b) a decrease in taxes and at a given price level consumers feel less wealthy c) an increase in taxes and at a given price level consumers feel less wealthy d) an increase in taxes and at a given price level consumers feel more wealthy