If the price of a product increases, then
A) the budget line rotates and the optimal quantity demanded, which corresponds to the higher price, decreases.
B) the budget line rotates and the optimal quantity demanded, which corresponds to the higher price, increases.
C) the budget line shifts outward and the optimal quantity demanded, which corresponds to the higher price, decreases.
D) the budget line shifts inward and the optimal quantity demanded, which corresponds to the higher price, increases.
Answer: A
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In an economy, investment is most likely to be dependent on:
A) the short-run real interest rate. B) the long-run real interest rate. C) the long-run nominal interest rate. D) the short-run nominal interest rate.
The income earned by entrepreneurs is
A) profit or loss. B) wages. C) interest. D) rent, wages, and interest. E) a mixture of rent, wages, interest, and profit.