"A reduction in gasoline prices caused the demand for gasoline to increase. The lower gas prices also led to an increase in demand for large cars, causing their prices to rise." These statements
What will be an ideal response?
contain one error; the lower gasoline prices would cause an increase in the quantity demanded of gasoline, not an increase in demand.
You might also like to view...
Suppose the exchange rate is 10 pesos per dollar and you use $1000 to purchase a one-year Mexican bond that pays 10% interest. Next year, the exchange rate is 11 pesos per dollar
Assuming you convert your funds back to U.S. dollars, how much money will you have in one year? A) $1000 B) $1100 C) $91 D) $0
According to Table 2.1, which presents hypothetical data on price elasticity of demand, which of the following is true about lamb?
A. Each 2.7% change in the price of lamb causes a 1% change in the quantity demanded of lamb.
B. The demand for lamb is inelastic.
C. Each 1% change in the price of lamb causes a 2.7% change in the quantity demanded of lamb.
D. Lamb is a normal good.
If the equilibrium rate of interest would be 10 percent, but the usury law sets 8 percent,
A. the quantity of funds supplied would be greater than the quantity demanded. B. economic efficiency would be promoted. C. some applicants for loans would likely be turned down. D. lenders would be able to fund fully all requests for loans.
Use the following figure to answer the next question.
A shift from AS1 to AS2 would be consistent with what economic event in U.S. history?
A. Demand-pull inflation in the late 1960s B. Cost-push inflation in the mid-1970s C. Great Recession in 2007-2009 D. Full-employment in the late 1990s