Which of the following statements is CORRECT?
A) When both demand and supply increase, the quantity decreases and the price might rise, fall, or remain the same.
B) When both demand and supply increase, the price rises and the quantity might increase, decrease, or remain the same.
C) When both demand and supply decrease, the quantity increases and the price might rise, fall, or remain the same.
D) When both demand and supply decrease, the quantity decreases and the price might rise, fall, or remain the same.
D
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Many people leave their servers tips in restaurants, even when they are not likely to visit the restaurant again. This is evidence that
A) people would rather pay for good service at an inexpensive restaurant than pay higher prices and receive poor service at an expensive restaurant. B) people treat others fairly even if doing so makes them worse off financially. C) there has been an improvement in the service people receive in restaurants over time, partly because the restaurant industry has become more competitive. D) people enjoy eating at restaurants more than eating at home.
Which of the following statements is false?
A) Keynes believed that monopolistic elements in the economy will prevent immediate price declines. B) Keynes believed that during periods of high unemployment, labor unions will prevent wages from falling fast enough to restore full employment. C) Keynes believed that interest rate flexibility will ensure that saving is equal to investment. D) Keynes did not believe in Say's law.