In the above figure, the economy initially is at point C. Then the domestic price level rises by 10. A
A) substitution effect would help move the economy to point D.
B) substitution effect would help move the economy to point B.
C) substitution effect would keep the economy at point C.
D) wealth effect would help move the economy to point B.
A
You might also like to view...
Suppose the marginal benefit the owner of a cherry orchard derives from hiring Lauren to pick cherries is $8 per hour. If the wage rate that Lauren earns is $7 per hour, then the orchard owner's surplus from Lauren's labor is ________ per hour
A) $7 B) $15 C) $1 D) $8 E) $0
Which of the following have to be in equilibrium for the economy to be in equilibrium?
A) the money market only B) the goods market only C) the output and asset markets D) the savings and investment markets E) the goods and output markets