A normal good is one:
A. whose amount demanded will decrease as its price decreases.
B. whose demand curve will shift leftward as incomes rise.
C. whose amount demanded will increase as its price decreases.
D. for which the consumption varies directly with incomes.
Answer: D
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An increase in the expected rate of inflation is most likely to cause an increase in ________
A) the ex post real interest rate B) the ex ante real interest rate C) the nominal interest rate D) the expected real interest rate E) none of the above
According to the interest rate effect, as the price level increases, households and firms' holdings of money ____, interest rates ____, investments ____, and the quantity RGDP demanded ____
a. increases, decrease, increase, decreases b. increases, increase, increase, decreases c. decreases, decrease, decrease, increases d. increases, increase, decrease, decreases
The precise definition of GDP is the total value of all
a. goods and services produced by a nation, minus household labor b. goods and services produced by a nation, minus depreciation c. goods and services produced for the marketplace during a given period d. final goods and services produced for the marketplace during a given period, within a nation's borders e. final goods and services produced within a nation's borders and by this nation's citizens abroad during a given period
Suppose that in a particular market, the demand curve is highly elastic, and the supply curve is highly inelastic. If a tax is imposed in this market, then the
a. buyers will bear a greater burden of the tax than the sellers. b. sellers will bear a greater burden of the tax than the buyers. c. buyers and sellers are likely to share the burden of the tax equally. d. buyers and sellers will not share the burden equally, but it is impossible to determine who will bear the greater burden of the tax without more information.