Which of the following would be most likely to push stock prices higher?
a. higher interest rates and the expectation of larger future corporate profits
b. higher interest rates and the expectation of smaller future corporate profits
c. lower interest rates and the expectation of larger future corporate profits
d. lower interest rates and the expectation of smaller future corporate profits
C
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What will decrease LRAS?
a. a natural disaster that destroys much of the infrastructure in the country b. an increase in the labor force c. an increase in the nation's energy reserves d. all
As a group, U.S. consumers have no income response for their consumption of ice cream so that the income elasticity of demand for ice cream equals zero
Does this mean that the change in ice cream consumption that results from a price increase is entirely composed of the substitution effect? A) Yes, the income effect associated with a price change is zero B) No, any price change moves the point of consumption to a new indifference curve, so there must be a non-zero income effect C) No, the income and substitution effects in this case move in opposite directions and completely offset one another, so it only appears that the income effect is zero D) We need more information about the goods to answer this question