A higher price reduces the quantity of a product demanded because
A. the purchasing power of individuals increases.
B. individuals will buy more of the product and less of its substitutes.
C. the financial assets of individuals increase.
D. individuals will buy less of the product and more of its substitutes.
Answer: D
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According to James and Skinner, in 19th century American manufacturing, ____________ was scarce, but __________________ was even scarcer
a. unskilled labor; capital b. capital; skilled labor c. unskilled labor; fuel sources d. capital; raw materials
Suppose that monetary policy becomes more expansionary, and as a result, the future rate of inflation is higher. Will this be good for the stock market?
a. Yes; the inflation will lead to higher wages, and this will be good for both the economy and the stock market. b. No; the inflation will lead to higher nominal interest rates, and this will reduce the present value of the future net earnings derived from stocks. c. Yes; the inflation rate will reduce the long-run rate of unemployment, and this will be good for the stock market. d. No; the expansionary monetary policy will lead to lower real interest rates, and this is generally bad for both the economy and the stock market.