Which of the following is true if the price of coffee increases?
A. The demand for tea, a substitute good, will decrease.
B. The demand for coffee will increase.
C. The demand for tea, a substitute good, will increase.
D. Both the demand for coffee and tea will increase.
Answer: D
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When the price level goes up, the purchasing power of the dollar
A) varies directly with the value of the euro. B) remains constant. C) also increases. D) falls.
The real business cycle theory holds that the business cycle
A) originates as a result of factors affecting aggregate supply. B) originates as a result of factors affecting aggregate demand. C) is the result of correctly anticipated policies. D) is the result of incorrectly anticipated policies.
Which is the most accurate statement?
A. The gold standard does not work in theory or practice. B. The euro is the official currency in every European country. C. There is virtually no difference between the gold standard and the gold exchange standard. D. At one time an ounce of gold was worth $35.
The European Union membership criteria includes all of the following EXCEPT
A) the country must participate in free trade with all of its goods and services. B) the country must follow market-based economics. C) the country must formally adopt the EU-wide rules such as technical standards, environmental inspections, banking supervision, etc. D) the country must be a stable functioning democracy.