If a technological advance makes it possible to produce computers at a lower cost
A) the demand for computers decreases. B) the demand for computers increases.
C) the supply of computers increases. D) the supply of computers decreases.
C
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The economy suffered a mild recession in 2001. Despite the recession, home sales and durable goods sales remained high. Which of the following is a plausible explanation?
A) The Fed's pursuit of contractionary policy stimulated these markets. B) The Fed caused a reduction in the federal funds rate to its lowest level in 40 years. C) Home building and consumer durable purchases are always high during a recession. D) Rising inflation encouraged many to invest in the real estate market.
The change in import spending due to a change in domestic real income is called:
A) marginal propensity to save. B) marginal propensity to consume. C) marginal propensity to import. D) none of the above.