Suppose Good X Has a Positive Income Elasticity of Demand

question 234

Multiple Choice

Suppose good X has a positive income elasticity of demand.This implies that good X could be
(i) A normal good.
(ii) A necessity.
(iii) An inferior good.
(iv) A luxury.

• A)(i)only
• B)(i)and (ii)only
• C)(i), (ii),and (iv)only
• D)(iii)only

Evaluate the role of expectations in shaping economic outcomes in the context of the Phillips curve.

Identify the factors that shift the Phillips curve and understand their implications.

Explain the concept of the natural rate of unemployment and its relevance to policy.

Understand the limitations and critiques of the Phillips curve framework.

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Definitions:

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with the unconditioned stimulus, eventually comes to trigger a conditioned response.

Unconditioned Stimulus

In classical conditioning, a stimulus that naturally and automatically triggers a response without any conditioning.

Successive Approximations

A series of gradual steps, each of which is more similar to the final desired response.

Law Of Effect

A principle of behavior psychology proposed by Edward Thorndike suggesting that actions which produce satisfying effects in a given situation become more likely to occur again, while actions producing unpleasant effects become less likely.