A utility-maximizing consumer buys so as to make ________ for all pairs of goods.
A. TUx/Px = TUy/Py
B. Px(MUx) = Py(MUv)
C. MUx = MUy
D. MUx/MUy = Px/Py
Answer: D
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According to the theory based on rational expectations and flexible wages and prices,
A) only the combination of discretionary fiscal policy and conservative monetary policy can affect real GDP in the long run. B) neither fiscal nor monetary policy influence real GDP in the long run. C) fiscal policy has less effect on real GDP than monetary policy in the long run. D) monetary policy has less effect on real GDP than fiscal policy in the long run.
A government budget surplus may enable all of the following except
A. A decrease in the money supply. B. A decrease in taxes. C. An increase in income transfers. D. An increase in expenditures on goods and services.
The process of transferring Federal Reserve deposits among banks as paid checks is called
A. savings. B. check clearing. C. lending D. reconciliation.
Which of the following would cause the aggregate demand curve to decrease, ceteris paribus?
a) An increase in income taxes. b) An increase in the value of the stock market. c) Strong performance of foreign economies. d) A decrease in interest rates.