In general, the income effect of an increase in the price of a normal good:
A. will cause the individual to buy more of that good because they have relatively more income.
B. will cause the individual to buy less of that good because they have relatively more income.
C. will cause the individual to buy less of that good because they have relatively less income.
D. will cause the individual to buy more of that good because they have relatively less income.
Answer: C
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The most common definition that monetary policymakers use for price stability is
A) low and stable deflation. B) an inflation rate of zero percent. C) high and stable inflation. D) low and stable inflation.
Which of the following statements about trade barriers is true?
A. The economic costs of trade barriers exceed their economic benefits, creating an efficiency loss for society. B. The economic benefits of trade barriers exceed their economic costs in developing nations. C. It is impossible to estimate the benefits of trade barriers. D. The economic costs and benefits of trade barriers are about equal.