Linesha, a college student working part-time received a wage increase. An avid movie buff, she increased her purchases of Blu-ray discs and reduced her purchases of DVDs. Based on this information
A) DVDs and Blu-ray discs are substitutes.
B) the cross-price elasticity between DVDs and Blu-ray discs is negative.
C) DVDs and Blu-ray discs are normal goods.
D) Blu-ray discs are normal goods and DVDs are inferior goods.
D
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The national security argument is used by those who assert they want to
A) increase imports as a way of strengthening their country. B) limit exports to control the flow of technology to third world nations. C) limit imports that compete with domestic producers important for national defense. D) limit all imports. E) increase exports as a way of earning money to strengthen their country.
In the rational expectations view, the best approach to fiscal policy is for the government to:
A. Cut taxes B. Balance its budget C. Eliminate transfer payments D. Fix government spending