Engel's law is consistent with the proposition that the income elasticity for primary products is less than unity.
Answer the following statement true (T) or false (F)
True
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Advocates of active stabilization policies, in defense of their views, argue that
A. stabilization is less necessary than is commonly advocated by monetarists. B. discretionary policy in not necessary because automatic stabilizers are sufficient. C. perfect stabilization is not possible, but moderate improvements in economic performance are possible, such as the response to the events of September 11, 2001. D. All of these responses are correct.
Which of the following is most likely to be a normal good?
a. trips to the laundromat b. macaroni-and-cheese dinners c. tickets to major league baseball games d. bus rides e. used paperback books
Rational individuals prefer to consume goods during the current year rather than in the future because of:
a. positive time preference. b. positive consumption preference. c. high expected rate of inflation. d. high market rate of interest.
Are markets always in equilibrium?
a. Yes, they are always at the equilibrium point, or very close to it. b. Yes, because few things tend to alter supply and demand. c. No, but if there is no interference, they tend to move toward equilibrium. d. No, they never "settle down" into a stable price and quantity. e. Uncertain, economic theory has no answer to this question.