The CPI and GDP deflator usually tell two different stories about how quickly prices are rising
a. True
b. False
Indicate whether the statement is true or false
False
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If the FDIC eliminated its insurance program for deposits, then
A) banks would probably hold fewer reserves. B) moral hazard would be increased. C) individual depositors would have more incentive to ascertain the soundness and solvency of the bank. D) the banking system would probably fail.
For a monopolistically competitive firm
A) price equals marginal revenue at all levels of output. B) price is less than marginal revenue at all levels of output. C) price is greater than marginal revenue at all levels of output except for the first unit. D) the demand curve is perfectly inelastic and marginal revenue is zero.
The principle of diminishing marginal utility says that:
a. as more of a good or service is consumed, demand decreases. b. as more of a good or service is consumed, the price will rise. c. the marginal utility of additional units consumed increases. d. an increase in income causes demand to increase. e. the marginal utility of additional units consumed decreases.
When consumers start to spend less and save more, classical macroeconomists believe that interest rates will then ______________ resulting in a(n) ________________ in investment
A) rise; increase B) fall; increase C) fall; decrease D) rise; decrease