If widgets and gidgets are complements and both are normal goods, then an increase in the demand for widgets will result from:
A. a decrease in the price of gidgets.
B. an increase in the price of widgets.
C. a decrease in income.
D. an increase in the price of widgets and a decrease in income.
Answer: A
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When the Fed buys a U.S. bond in the open market
A) its action contracts total reserves and the money supply. B) total reserves increase by the amount of the purchase but the money supply stays the same. C) its action expands total reserves and the money supply. D) its action has no effect on the total reserves or the money supply because the check it writes increases reserves at one bank but they fall at another.
Consumption spending that is independent of the level of disposable income is known as:
a. marginal consumption. b. transitory consumption. c. permanent consumption. d. relative consumption. e. autonomous consumption.
Which statement about entrepreneurship in America is true?
A. Alexander Graham Bell and Thomas Edison were two of the most famous American inventors who became entrepreneurs. B. Often the entrepreneur is an innovator. C. The vast majority of entrepreneurs in America either work for themselves or have just one or two employees. D. All of the statements are true.
Which statement is false?
A. Before the Civil War about three quarters of the farms of over 500 acres were located in the South. B. The great abundance of land was the most influential factor in the United States' economic development during the 19th century. C. Although the percentage of Americans living on farms has declined substantially over the last 70 years, the actual number of people living on farms has remained constant. D. None of the statements are false.