Question

In: Economics

A change in the price of a substitute good will affect the demand for any good....

A change in the price of a substitute good will affect the demand for any good. a. true . b. false

The demand curve is related to choice. a. true b.false

The positive slope of the supply curve can be explained by comparative advantage and opportunity cost. a. true b.false

Across nations, per capita real GDP and the Social Progress Index exhibit a generally negative relationship. a. true b. false

According to the textbook, policies that sacrifice human welfare in order to achieve economic growth for its own sake never make sense. a. true b. false

If the economy is at the natural rate of unemployment, then it has an unemployment rate equal to zero. a. true b. false

Cyclical unemployment arises during an economic slow down. a. true b. false

If inflation is correctly anticipated, what happens?

a.	Neither borrowers nor lenders gain	b.	Borrowers lose and lenders gain
c.	Both borrowers and lenders gain	d.	Borrowers gain and lenders lose

With respect to lenders and debtors, expected inflation ______ neutral and unexpected inflation ______ neutral.

a.	is not; is not	b.	is; is not
c.	is not; is	d.	is; is

If inflation is correctly anticipated, what happens?

a.	Neither borrowers nor lenders gain	b.	Borrowers lose and lenders gain
c.	Both borrowers and lenders gain	d.	Borrowers gain and lenders lose

Expert Solution

A change in the price of substitute good will affect the demand for any good. False.

It is false because if there is change in price of a substitute good then there will change in demand of related good. It means the demand of that good will change for which it is substitute. It means demand of related goods will change and demand of non related goods will be unchanged or will be unaffected by that price change.

The demand curve is related to choice: False.

It is true that demand curve is basically a graphical representation of inverse relationship between price of good i.e own price and demand of that good. Choice is a function of demand and during demand curve it is also assumed that choice of that person is fixed. So demand curve is not related to choice the choice can be a one factor of demand but it is not related to demand curve.

The positive slope of supply curve can be explained by comparative advantage and opportunity cost.- False.

It is false because opportunity cost or comparative advantage will come into the play when we sacrifice one thing for another because in that particular area there is a opportunity of lower cost or comparative advantage. But supply curve is a relationship between supply of that good and price of that good.

Across the nations, per capita real GDP - - - generally negative relationship. - False.

Per capita real GDP and social progress index will have positive relationship. Because when per capita real GDP will increase the social progress index will be more.

According to the text book, policies that sacrifice human welfare in order to achieve economic growth never make sense. - True.

If we sacrifice human welfare for achieving economic growth that dose not make any sense.

If the economy is at natural rate of unemployment it is unemployment equal to zero. False

Natural rate of unemployment means it will be at certain level i.e unemployment could be 1 or 2% depend on situation of the economy.

Cyclical unemployment arises during recession : True.

Rahul Sunny answered 1 year ago

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