Suppose when the price of hybrid automobiles rises, consumers buy fewer hybrid automobiles. This implies that
A) there is a positive relationship between hybrid automobile prices and quantities purchased by consumers.
B) there is a negative relationship between hybrid automobile prices and quantities purchased by consumers.
C) there is a direct relationship between hybrid automobile prices and quantities purchased by consumers.
D) there is a one-to-one relationship between hybrid automobile prices and quantities purchased by consumers.
Answer: B
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In the figure above, the shift in the aggregate demand curve from AD1 to AD3 could be the result of
A) a decrease in the real interest rate. B) a decrease in the buying power of money. C) an increased expectation of a recession that lowers the expected rate of profit from investment. D) a decrease in the foreign exchange rate. E) an increase in the price level.
If the inflation rate for a given year is 5 percent, then $1.00 in the previous year will buy goods worth approximately $0.95 this year
a. True b. False Indicate whether the statement is true or false