The income effect of a price change results in a
A) shift of the demand curve when income changes.
B) movement along the demand curve due to a change in relative prices.
C) shift of the demand curve due to a change in purchasing power brought about by the price change.
D) movement along the demand curve due to a change in purchasing power brought about by the price change.
Answer: D
You might also like to view...
According to the quantity theory of money, a decrease in prices would be due to:
A. a decrease in the money supply. B. an increase in the money supply. C. a decrease in the production of output. D. an increase in the production of output.
Unemployment insurance was created as part of the
a. Social Security Act of 1935 b. Full Employment Act of 1946 c. Keynesian Act of 1935 d. Phillips Act of 1947 e. National Recovery Act of 1933
The Invisible Hand Principle suggests that
a. market prices direct individuals to produce more goods. b. individuals pursuing their own interests detract from the economic well-being of society. c. there should be stronger governmental initiatives to ensure cooperation for the betterment of society. d. market forces tend to channel the actions of self-interested individuals into activities that promote the general betterment of society.
Which of the following events occurred during the 2000 to 2003 time-frame and had an important impact on the deficit/surplus projections?
A. The decrease in unemployment rates from 2002 to 2003 B. The increase in inflation rates from 2000 to 2002 C. The recession of 2001 D. The increase in interest rates from 2001 to 2003