An indication that the economy is in recession, e.g., a rise in the number of used clothing stores for babies, suggests that
a. used clothes for babies are a necessity
b. used clothes for babies are an inferior good
c. used clothes for babies are a normal good
d. new clothes for babies are a luxury
e. used clothes for babies have price-elastic demand
B
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Which of the following applies to a real-world socialistic economy?
a. Private ownership of all factors of production. b. Government ownership of all factors of production. c. Government ownership of most of the factors of production. d. Lack of central planning.
Other things equal, if a full-employment economy reallocated a substantial quantity of its resources to capital goods, we would expect:
A. labor productivity to rise. B. present consumption to rise. C. a lower rate of growth of real GDP. D. future consumption to fall.