Purchases of which of the following goods would be dramatically reduced during a recession?
A) ink pens B) refrigerators C) gasoline D) tomatoes
B
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The rational expectations hypothesis is a theory that states that
A) people make their economic plans by using all available past and present information and their understanding about how the economy operates. B) individuals can predict the future perfectly, at least with respect to macroeconomic variables like the interest rate and inflation. C) people make their economic plans in an irrational, intuitive manner. D) people make their economic plans by relying on the policy statements made by the President and by leaders in Congress.
Suppose that the interest rate available to you on a long-term bond is 4 percent. If you hold $1,000 of your wealth in currency instead of in the form of a bond, the annual opportunity cost is
A) $0.04. B) $4. C) $40. D) $400.
Define and distinguish between final goods and intermediate goods
What will be an ideal response?
Noncash gifts:
A. increase the utility of recipients by introducing them to products they have not consumed before. B. reduce recipient utility relative to a cash gift because noncash gifts often fail to match recipient preferences. C. entail as much utility as do cash gifts. D. increase the utility of recipients because many people are uncertain of their own preferences.