A recession occurs and people's incomes decrease. Knowing that an iPad is a normal good, you predict that the demand for an iPad
A) increases.
B) decreases.
C) might increase or decrease.
D) remains unchanged.
B
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The International View of the Great Depression blames the contraction in the U.S. economy on
(a) the failure of the U.S. markets to permit a fall in aggregate prices under the gold standard or to devalue its exchange rate. (b) exports' and imports' large proportion of total GDP in the U.S. (c) Great Britain abandoning the gold standard. (d) all of the above.
The statement: "If everyone trades in the competitive marketplace, all mutually beneficial trades will be completed, and the resulting equilibrium allocation of resources will be economically efficient." is formally known as:
A) the law of supply and demand. B) the first theorem of supply and demand. C) the first theorem of welfare economics. D) the first theorem of efficiency in economics.
Government can correct for negative externalities by
A) decreasing taxes. B) increasing taxes or regulation. C) allowing the market system to correct the problem. D) decreasing the costs to those responsible for the externality.
There are two kinds of changes in net taxes: First, net taxes can change if the government changes its tax or transfer policies. Second, net taxes change automatically as income rises and falls, without any change in policy. The _________ kind of change sets off the multiplier process, while the _________ kind of change occurs during the multiplier process
a. first; first. b. first; second. c. second; first. d. second; second. e. None of the above.