A technological change that enables a student to learn more French in the same amount of study time
a. causes the budget line to rotate inward
b. causes an outward, parallel shift of the budget line
c. shifts the "demand curve" inward
d. is equivalent to a increase in the "price" of an hour spent studying French
e. makes the student better off
E
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A theory of aggregate economic fluctuations called real business cycle theory holds that
A) changes in the real money supply are the only demand shocks that affect the natural rate of output. B) aggregate demand shocks do affect the natural rate of output. C) aggregate supply shocks do affect the natural rate of output. D) changes in net exports are the only demand shocks that affect the natural rate of output.
Jane has noticed that she used to pay $2 for coffee and now she pays $2.50. Which of the following statements is TRUE?
A) The relative price of coffee has increased compared to tea. B) The money price of coffee has increased. C) The law of supply explains why the price of coffee has increased. D) Jane will stop consuming coffee.