Which of the following effects provide incentives for consumers to spend less when the price level rises?
a. the wealth effect and the interest-rate effect
b. the wealth effect but not the interest-rate effect
c. the interest-rate effect but not the wealth effect
d. neither the wealth-effect nor the interest rate effect
a
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In the market for magazines, the "income effect" means that
A) magazines are usually purchased by people with higher than average incomes. B) a decrease in the price of a substitute product like books will make magazine readers feel a little poorer than they were before. C) an increase in the price of magazines will reduce the total purchasing power of magazine readers, making them able to afford fewer magazines. D) an increase in the price of magazines will raise the relative price of magazines to books, causing magazine readers to read more books and fewer magazines.
If the price of a video rental is below its equilibrium price, there will be a ________ of video rentals and the price will ________
A) shortage; rise B) shortage; fall C) surplus; rise D) surplus; fall
When the domestic money prices of goods are held constant
A) a nominal dollar appreciation makes U.S. goods cheaper compared with foreign goods. B) a nominal dollar depreciation makes U.S. goods less appealing in foreign markets. C) a nominal dollar appreciation does not affect the prices of U.S. goods. D) a nominal dollar depreciation makes U.S. goods more expensive compared with foreign goods. E) a nominal dollar depreciation makes U.S. goods cheaper compared with foreign goods and a nominal dollar appreciation makes U.S. goods more expensive compared with foreign goods.
The total costs of regulation
A) include increased taxes and increased prices of the products being regulated. B) are paid entirely by the regulated industries. C) are much higher than just the explicit government outlays to fund the administration of various regulations. D) are paid entirely by the consumers of regulated industries.