The cross elasticity of demand for strawberry jelly and grape jelly is likely to be
A) positive because they are substitutes.
B) positive because they are complements.
C) negative because they are substitutes.
D) negative because they are complements.
E) negative because they are inferior goods.
A
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Which of the following is an example of a normative economic statement?
A) Prices rise when the government prints too much money. B) Universal access to quality health insurance is the most important domestic policy issue of our time. C) Interest rates rise when the government runs persistent budget deficits. D) Extending the time in which laid-off workers are eligible to receive government unemployment compensation has increased the unemployment rate. E) Lowering marginal income tax rates depresses consumer spending.
During a recession, tax revenues ________ while government transfer payments ________, thereby mitigating part of the adverse effects of a recession and stabilizing the economy
A) fall; decrease B) fall; increase C) rise; decrease D) rise; increase