If the price of hot dogs were to decrease, which of the following changes would we expect to occur in the hot dog bun market?
a. The equilibrium price of hot dog buns would decrease and the quantity of hot dog buns sold would increase.
b. The equilibrium price of hot dog buns would increase and the quantity of hot dog buns sold would decrease.
c. The equilibrium price of hot dog buns would increase and the quantity of hot dog buns sold would increase.
d. The equilibrium price of hot dog buns would decrease and the quantity of hot dog buns sold would decrease.
e. The equilibrium price of hot dog buns would stay the same and the quantity of hot dog buns sold would increase.
c
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Real business cycle theory explains changes in employment and output by focusing on
A) changes in fiscal policy. B) real supply-side factors. C) the interaction of fiscal and monetary policies. D) changes in monetary policy.
Speculators believing cocoa prices are going to be higher next year will
A) buy cocoa futures, cause the expected future price of cocoa to fall, and induce some additional cocoa to be stored for future consumption. B) buy cocoa futures, cause the expected future price of cocoa to rise, and induce some additional cocoa to be stored for future consumption. C) sell cocoa futures, cause the expected future price of cocoa to fall, and induce some additional cocoa to be stored for future consumption. D) sell cocoa futures, cause the expected future price of cocoa to rise, and induce some additional cocoa to be stored for future consumption. E) sell cocoa futures, cause the expected future price of cocoa to fall, and induce greater current consumption of cocoa.