If a good is considered a normal good, the demand curve will shift ________ when income increases because ________
A) right; the income and substitution effects move in the same direction.
B) right; the income and substitution effects move in the opposite direction.
C) left; the income and substitution effects move in the same direction.
D) left; the income and substitution effects move in the opposite direction.
A
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The gold standard is a type of
A) fixed exchange rate system. B) flexible exchange rate system. C) floating exchange rate system. D) barter currency system.
Suppose the government wants to maintain a balanced budget. To achieve this goal, when the economy falls into recession government would need to ________ taxes, which would cause aggregate demand to ________
A) decrease; decrease B) decrease; increase C) increase; decrease D) increase; increase