According to the substitution effect, if the price of a product goes down
A) the consumer will buy more of the good at the lower price than at a higher price, creating a downward sloping demand curve.
B) the consumer will buy more of the good at a lower price than at a higher price, creating a horizontal demand curve.
C) the consumer will not change the level of purchases of the good when the price changes, making the demand curve a vertical line.
D) the real income of the consumer will increase, causing the consumer to want to buy more of the good, creating a downward sloping demand curve.
Answer: A
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An increase in technology ________ potential GDP and ________ aggregate supply
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases E) does not change; does not change
The equilibrium price is the price at which the quantity
A) sold equals the quantity bought. B) demanded equals the quantity sold. C) demanded equals the quantity supplied. D) supplied equals the quantity bought.