The Slutsky equation shows that, holding the total effect constant, the income effect will be larger for goods that
A) have a smaller substitution effect.
B) make up a larger percentage of a household's budget.
C) have perfectly inelastic demand curves.
D) All of the above.
B
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If a tariff is imposed on imports of shrimp into the United States, U.S. consumers ________ and U.S. producers ________
A) lose; lose B) gain; lose C) gain; gain D) gain; are unaffected E) lose; gain
A bank's assets consist of $500,000 in total reserves, $1,600,000 in loans, and a building worth $1,200,000 . Its liabilities and capital consist of $2,000,000 in demand deposits and $1,300,000 in capital. If the required reserve ratio is 20 percent, what is the level of the bank's excess reserves? How much could it loan out as a result?
a. $100,000; $100,000 b. $100,000; $400,000 c. $400,000; $500,000 d. $400,000; $2,000,000