In the face of an increase in oil prices, if the government's primary objective is to keep prices from falling, then policymakers should

According to the income effect, when the price of automobiles rises, people buy fewer automobiles because:

a. they substitute other forms of transportation for driving. b. the nominal amount of their paychecks is smaller. c. the purchasing power of their income is reduced. d. their demand for automobiles is very elastic.

In 2010, the imaginary nation of Bovina had a population of 5,000 and real GDP of 600,000 . In 2011 it had a population of 5,200 and real GDP of 636,480 . During 2011 real GDP per person in Bovina grew by

a. 2 percent, which is high compared to average U.S. growth over the last one-hundred years. b. 2 percent, which is about the same as average U.S. growth over the last one-hundred years. c. 4 percent, which is high compared to average U.S. growth over the last one-hundred years. d. 4 percent, which is about the same as average U.S. growth over the last one-hundred years.