The law of demand tells us that people will buy more of a good if
A) the price of that good decreases.
B) the prices of other goods decrease.
C) people's income increases.
D) every factor that can affect people's buying decisions changes.
A
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If the Fed increases the discount rate, it is pursuing
A) a contractionary policy because it will be more costly for banks to borrow funds and this puts upward pressure on interest rates in the economy. B) a contractionary policy because it reduces banks' profit margins by raising the cost of borrowing and lowering the return on lending. C) an expansionary policy because it raises the cost of holding excess reserves in the banking system. D) an expansionary policy because it increases bank profits by putting upward pressure on the interest rates that banks can charge on its loans
The amount of money actually received in a particular period is called:
A. nominal income. B. real income. C. a cost-of-living index. D. consumer surplus.