Technological advancements have led to lower prices and an increase in the sale of color laser printers. How does this affect the market for traditional inkjet printers?
A) The demand curve for inkjet printers shifts to the right.
B) The demand curve for inkjet printers shifts to the left.
C) The quantity of inkjet printers demanded increases.
D) The quantity of inkjet printers demanded decreases.
Answer: B
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
If, in an economy, a $200 billion increase in consumption spending creates $200 billion of new income in the first round of the multiplier process and $160 billion in the second round, the marginal propensity to consume and the multiplier are, respectively
A. 0.8 and 5.0. B. 0.2 and 1.25. C. 0.4 and 2.5. D. 0.4 and 1.67.
Which of the following statements is true of the gains to trade?
A) The gains to trade expand as trading partners become more alike. B) The gains to trade shrink as trading partners become more alike. C) The trading nations can enjoy gains to trade even when none of these countries has a comparative advantage in the production of any good. D) The gains to trade are equal for all trading partners.
The more bowed out the Lorenz curve is, the
A) more equal the distribution of income. B) less equal the distribution of income. C) richer the society. D) poorer the society.