Consider the market for chicken. Assuming that chicken and beef are substitutes, an increase in the price of beef will:
a. decrease the demand for chicken creating a lower price and a smaller amount of chicken purchased in the market.
b. decrease the supply of chicken creating a higher price and a smaller amount of chicken purchased in the market.
c. increase the demand for chicken creating a higher price and a greater amount of chicken purchased in the market.
d. increase the supply of chicken creating a lower price and a greater amount of chicken purchased in the market.
c
You might also like to view...
Which of the following is not an argument against inflation targeting?
A) Inflation targeting reduces the flexibility of the Fed to pursue other policy goals. B) Inflation targeting assumes that the Fed can accurately forecast future inflation rates. C) Inflation targeting holds the Fed accountable for an inflation goal, but may make it less likely the Fed will achieve other goals. D) Inflation targeting makes monetary policy ineffective because the targets are publicly announced.
Zero lower bound refers to the fact that
A) the government budget deficit must be zero in the long run. B) the lowest possible level of the current account deficit is zero in the long run. C) the inflation rate can never decline below zero. D) nominal interest rates cannot fall below zero.