The act of buyers and sellers freely conducting business in a market
a. voluntary exchange
b. free market system
c. profit motive
d. fraud
Ans: a. voluntary exchange
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In Brazil, the income elasticity of demand for dairy is 0.7 and for fruit and vegetables it is 0.5. These elasticities mean that if the income of Brazilians decreases, they will purchase ________ dairy and ________ fruits and vegetables
A) less; less B) more; more C) more; less D) less; more
A budget deficit occurs when government receipts exceed government spending
a. True b. False Indicate whether the statement is true or false
The number of firms in an oligopolistic industry
A) must be less than 10. B) must be less than 20. C) must be small enough that firms are interdependent. D) must be large enough for firms to be independent.
For this question, assume that the Fed is expected to respond to any event by keeping output constant (i.e., equal to its initial level). An unexpected increase in taxes will cause
A) stock prices to fall. B) stock prices to rise. C) no change in stock prices. D) an ambiguous effect on stock prices.