What is the term used for the process by which an entrepreneur creates or recognizes a new and better product, acquires it, and brings it to market, making older substitutes obsolete?
A. Creative destruction
B. Innovation
C. The substitution effect
D. Backward-bending innovation
Answer: A
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If the Federal Reserve decreases the Federal funds rate, other short-term interest rates ________ and the exchange rate ________
A) fall; falls B) do not change; rises C) fall; does not change D) fall; rises E) do not change; falls
When people's incomes increase, the demand for a good increases. The good is called
A) an inferior good. B) a complement. C) a substitute. D) a normal good.
Because people prefer name-brand pain-relieving drugs over store-brand pain-relieving drugs, demand curves do not slope downward for pain-relieving drugs
Indicate whether the statement is true or false
One productivity standard for income distribution stated in the text is
A) income distribution should be based on contribution to society's total output. B) tax payments are higher for higher income people. C) poor people pay too much in taxes. D) the poor should contribute more to society.