Focal point equilibria are consistent with:
A. a nonmarket economy.
B. the "you get what you pay for" rule.
C. rational choice theory.
D. the "follow the leader" rule.
Answer: D
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The biggest problem caused by a deflation is that
A) prices fall. B) wages fall. C) interest rates rise. D) people cannot repay their debts.
A country is said to be experiencing deflation when
A) prices of most goods and services are rising over time. B) prices of most goods and services are falling over time. C) total output is rising over time. D) total output is falling over time.
How does an increase in the price of laptop memory chips affect the market of laptops?
a. The demand curve for laptops to shift to the right b. The demand curve for laptops to shift to the left c. The supply curve for laptops to shift to the right d. The supply curve for laptops to shift to the left
According to traditional economics, rational consumers seek to maximize their
a. “bang for the buck” b. similarity to other consumers c. number of substitutes d. “bounded rationality”