« previous next »

Author Question: Suppose that macroeconomic forecasters predict that the economy will be expanding in the near ... (Read 82 times)

jparksx

  • Hero Member
  • *****
  • Posts: 570
on: Jul 1, 2018
Suppose that macroeconomic forecasters predict that the economy will be expanding in the near future. How might managers use this information?
 
  What will be an ideal response?

Question 2

Suppose that the interest rate paid to savers increases. As a result, Tom wishes to save less. This suggests that, for Tom,
 
  A) the substitution effect is greater than the income effect.
  B) the income effect is greater than the substitution effect.
  C) utility maximization is not occurring.
  D) future consumption is a luxury.


tofugiraffe

  • Sr. Member
  • ****
  • Posts: 319
Reply #1 on: Jul 1, 2018
Answer to Question 1

Economic expansion increases consumer incomes, which will increase the demand for normal goods and decrease the demand for inferior goods. Thus a producer of normal goods might be anticipating a future increase in demand and thus considering expansion, while a producer of inferior goods might be preparing for a decrease in demand and considering contraction or a movement into a different good line.

Answer to Question 2

B


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question

jparksx

  • Hero Member
  • *****
  • Posts: 570
Reply #2 on: Jul 1, 2018
Correct answers!


tofugiraffe

  • Sr. Member
  • ****
  • Posts: 319
Reply #3 on: Jul 1, 2018
Great! Please up vote :D


« previous next »
 

Did you know?

A seasonal flu vaccine is the best way to reduce the chances you will get seasonal influenza and spread it to others.

Did you know?

Asthma occurs in one in 11 children and in one in 12 adults. African Americans and Latinos have a higher risk for developing asthma than other groups.

Did you know?

Recent studies have shown that the number of medication errors increases in relation to the number of orders that are verified per pharmacist, per work shift.

Did you know?

HIV testing reach is still limited. An estimated 40% of people with HIV (more than 14 million) remain undiagnosed and do not know their infection status.

Did you know?

Although not all of the following muscle groups are commonly used, intramuscular injections may be given into the abdominals, biceps, calves, deltoids, gluteals, laterals, pectorals, quadriceps, trapezoids, and triceps.

Major trunk lines carrying long-distance traffic crisscrossed the area east of the Mississippi. The Major trunk lines carrying long-distance traffic crisscrossed the area east of the Mississippi. The
A turbine wheel is turned by the expanding exhaust gases. A turbine wheel is turned by the expanding exhaust gases.
Creating a Continental Economy Creating a Continental Economy
Let A ⊆ R and p ∈ A. Suppose A\{p}6= ∅. Prove that p is an isolated point of A if and ... Let A ⊆ R and p ∈ A. Suppose A\{p}6= ∅. Prove that p is an isolated point of A if and ...
Suppose that we have a sample space with five equally likely experimental outcomes: E1, E2, E3, ... Suppose that we have a sample space with five equally likely experimental outcomes: E1, E2, E3, ...
Suppose the market supply curve is p = 5Q. If price increases from 10 to 15, the change in ... Suppose the market supply curve is p = 5Q. If price increases from 10 to 15, the change in ...
Video: Coronary Heart Disease Animation

For a complete list of videos, visit our video library