Suppose That the Price of Butter Is $3 Per Pound

question 49

Multiple Choice

Suppose that the price of butter is $3 per pound and the price of margarine is $2 per pound. If the price of butter rises to $3.60 and the price of margarine rises to $3,then the absolute price of butter has _______________ and the relative price of butter has _______________.

• A) risen; fallen
• B) fallen; risen
• C) risen; risen
• D) fallen; fallen

Understand the impact of changes in money supply on price levels and real output according to different economic theories.

Analyze the role of interest rates in saving and investment decisions according to Keynesian economics.

Learn about the criticisms of rational expectations theory and supply-side economics.

Recognize the influence of economic thought leaders and their theories on the evolution of economic policies.

---

Definitions:

Cognitive Ability

Cognitive ability refers to the capacity to perform higher mental processes of reasoning, remembering, understanding, problem-solving, and decision-making.

University-Level Courses

Advanced academic or vocational subjects taught at universities or similar institutions to students working toward a degree or certification.

Proximal Goal

A short-term objective set to be achieved in the near future, contributing towards reaching a broader, long-term goal.

Behaviourist School

A psychological approach focusing on observable behaviors and external stimuli, often excluding internal thoughts and feelings from its analysis.