An increase in the real interest rate is an example of a
A) pure substitution effect.
B) substitution effect and a positive income effect.
C) substitution effect and a negative income effect.
D) substitution effect and an income effect whose sign depends on whether the consumer is initially a borrower or a lender.
D
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Which of the following federal agencies is NOT engaged in social regulation?
A) Environmental Protection Agency B) Federal Trade Commission C) Food and Drug Administration D) Federal Deposit Insurance Corporation
Savings is considered the portion of income:
A. that is not immediately spent on consumption of goods and services. B. that is spent on productive inputs, such as factories, machinery, and inventories. C. that is placed in an individual's savings account. D. in any interest-bearing account.
Which of the following ways to recruit soldiers utilizes incentives?
A. waging a war on another country B. a draft C. universal service D. higher salaries
The Dominican Republic has a comparative advantage in the production of tobacco, and Panama has a comparative advantage in the production of oranges. If both countries specialize based on the theory of comparative advantage
A. only the production of both goods will increase. B. only the consumption of both goods will increase. C. only the production of tobacco will increase. D. the production and consumption of both goods will increase.