Scarce goods have positive market prices.
An increase in money supply causes inflation. (positive statement). •
Government budget deficits are higher during recessions. When the government spends more than it collects in revenues, recessions result. (association by causation). •
Macroeconomics is the study of nation and global economics without assuming individuals are rational. •
Increase in the income of consumers would result in an increase in the equilibrium price of iPods. •
A market allocation system leads to the increase of the quantity and quality of goods offered for sale. •
First come first serve wastes resources in an attempt to be first. •
Barter exchanges require double conscious of wants and involve higher transaction costs than monetary exchanges. •
The double conscious of wants is eliminated by the use of money. •
The law of demand states that as price increases, quantity demanded decreases. •
Inferior goods are purchased during recession.
A rightward shift in the demand curve for automobiles would result from an increase in the value of household stock portfolios •
Items with same input: increase in price of one leads to decrease in the supply of the other. •
Decrease in equilibrium price of butter caused from a decrease in the price of margarine (complementary good) •
Leftward shift in the demand curve for automobiles results from an increase in the price of steel and an input in production. •
“Since a household cannot afford to keep adding indefinitely to its debt, a country cannot afford to do so either.” The fallacy of composition. •
Price ceiling of $3 per gallon on gas would lead to long lines and a black market or higher secondary price for gasoline. •
Minimum wage is an example of market intervention. A minimum wage is a price floor that can result in unemployment. •
Market systems: command or planned economies experienced both surpluses and shortages of goods and services. •
Those with the most and highest quality...
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