A bumper crop of apples can lead to sharply lower market prices and a decline in earned farm income primarily because
A. The income elasticity of demand for apples is negative.
B. Foreign exports of apples to the United States should increase.
C. The demand curve faced by individual apple farmers is price-inelastic.
D. The demand for apples is price-inelastic.
Answer: D
Economics
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Given that real interest rates are constant, an increase in the expected rate of inflation will tend to
A) decrease the nominal rate of interest. B) increase the nominal rate of interest. C) cause lower inflation rates. D) cause no change in the nominal rate of interest.
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According to Classical interest rate theory, falling interest rates will
A) increase the demand for money. B) decrease the demand for money. C) decrease investment expenditures. D) decrease the saving rate.
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