In comparing one market basket, A, to others to the northwest or southeast, we can say that a typical consumer will
a. prefer A to any other market basket.
b. prefer any other market basket to A.
c. be indifferent between A and any other market basket.
d. find any of the above are possible.
d. find any of the above are possible.
You might also like to view...
The idea of purchasing power parity:
A. always holds. B. rarely holds. C. explains why standards of living have changed over time. D. explains how standards of living is fixed over time.
Which of the following examples would most likely cause hyperinflation?
a. A nation gradually repays a large debt over a ten-year period. b. A nation increases its money supply to get out of a recession. c. A nation is given a reprieve on a large debt in return for lowering tariffs. d. A nation rapidly prints money to pay off a very large debt to another nation.
According to the permanent income hypothesis, which of the following should raise current consumption the most?
a) a lottery prize of $1,000 b) an unexpected year-end bonus of $1,000 c) a temporary tax cut of $1,000 d) an increase of $1,000 in annual salary e) an inheritance of $1,000
An economy in which output has decreased and prices have increased would suggest that there has been a:
A. negative demand side shock. B. negative supply side shock. C. positive demand side shock. D. positive supply side shock.