The compensated demand curve only responds to the income effect from a price change
Indicate whether the statement is true or false
False . Income effects do not occur on a compensated demand, as income automatically adjusts to price changes such that utility remains constant.
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The demand for loanable funds curve is
A) downward sloping when plotted against the real interest rate. B) vertical at the full employment level of investment. C) constant at the maximum expected profit rate. D) upward sloping when plotted against the real interest rate.
Exhibit 2-7 Production possibilities curve
For the economy shown in Exhibit 2-7 to operate at point C, it must:
A. be willing to lower the price of grain. B. use its given resources more efficiently than it would at point A. C. experience resource unemployment. D. experience an increase in its resources and/or an improvement in its technology.