When the price of sugar was "low," consumers in the United States spent a total of $3 billion annually on its consumption. When the price doubled, consumer expenditures actually INCREASED to $4 billion annually. This indicates that:
A. sugar is a Giffen good.
B. the demand for sugar is elastic.
C. the demand curve for sugar is upward sloping.
D. None of the statements is correct.
Answer: D
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The efforts of individuals to protect themselves against losses as a result of inflation
A) are irrational because one person's loss as a result of inflation is someone else's gain. B) can only succeed if everyone correctly anticipates the rate and timing of inflation. C) cannot succeed because no private citizen has the ability to stop inflation. D) use up valuable resources that could have been employed in other ways.
According to the Ricardian equivalence proposition, current deficits
A) will not affect consumption or national saving. B) will affect consumption but not national saving. C) will affect national saving but not consumption. D) will affect both consumption and national saving.
Darby (1984) argues that the problem with declining productivity of the 1970s was not an issue. He adjusted labor productivity upward to take into account which of the following?
(a) The immigration policies of the 1970s restricted the free migration of highly qualified workers. (b) More men than women re-entered the workforce. (c) The overall labor force was relatively young and comprised of individuals still maturing in their knowledge base and skill sets. (d) The labor force of the 1970s was older, more senior and had gained more experience than in the past.
Increases in rent are generally due to
A. rises in the supply of land. B. rises in the MRP of land. C. declines in the supply of land. D. declines in the MRP of land.