For each of the following changes, show the effect on the demand curve and state what will happen to market equilibrium price and quantity in the short run
a. Consumers expect that the price of the good will be higher in the future.
b. The price of a substitute good rises.
c. Consumer incomes fall, and the good is normal.
d. Consumer incomes fall, and the good is inferior.
e. A medical report is published showing that this good is hazardous to your health.
f. The price of the good rises.
a. Demand increases (now); equilibrium price and quantity increase.
b. Demand increases; equilibrium price and quantity increase.
c. Demand decreases; equilibrium price and quantity fall.
d. Demand increases; equilibrium price and quantity increase.
e. Demand decreases; equilibrium price and quantity fall.
f. This is a movement along the demand curve, and the quantity demanded will decrease.
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A nation's real GDP was $250 billion in 2014 and $265 billion in 2015. Its population was 122 million in 2014 and 125 million in 2015. What is the growth rate of real GDP per capita in 2015?
A. 5.0% B. 1.1% C. 3.4% D. 2.5%
If the economy is in a recession, in an effort to move the economy to the long-run equilibrium, the government could:
A. increase spending to increase aggregate demand. B. decrease spending to decrease aggregate demand. C. increase spending to decrease aggregate demand. D. decrease spending to increase aggregate demand.
Prices usually reflect
a. only the value of a good to society. b. only the cost to society of making a good. c. both the value of a good to society and the cost to society of making the good. d. neither the value of a good to society nor the cost to society of making the good.
The parameters of an econometric model _____.
A. include all unobserved factors affecting the variable being studied B. describe the strength of the relationship between the variable under study and the factors affecting it C. refer to the explanatory variables included in the model D. refer to the predictions that can be made using the model