Which of the following statements best describes an inferior good?
A) An inferior good is a good whose quantity supplied always exceeds the quantity demanded.
B) An inferior good is a good whose demand decreases with an increase in consumers' income.
C) An inferior good is a good that is sold at a subsidized price.
D) An inferior good is a good that is rationed by the government.
B
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A temporary increase in government spending that leads to only a small decline in lifetime wealth likely shifts the output demand curve to the
A) right by more than the rightward shift in output supply. B) right by less than the rightward shift in output supply. C) left by more than the leftward shift in output supply. D) left by less than the leftward shift in output supply.
How can the Federal Reserve, by expanding the money supply and lowering interest rates, alleviate a recession?
What will be an ideal response?