A change in the slope of a budget line is solely the result of a change in:
A. consumer preferences.
B. the price of one good relative to the other.
C. money income.
D. the slope of the indifference curve that is tangent to the budget line.
Ans: the price of one good relative to the other.
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The effects of tax incentive programs such as IRAs and 401(k) accounts suggest that these government programs designed to increase saving lead to ________ in the private capital stock
A) virtually no change B) a slight decrease C) a slight increase D) a significant increase
When comparing point A, which lies within a utilities possibilities frontier, with point B, which lies on the same utilities possibilities frontier,
A) A is necessarily more efficient than B. B) A is necessarily more equitable than B. C) B is necessarily more efficient than A. D) B is necessarily more equitable than A.
To eliminate built-in inflation from the economy, the Fed must
a. announce its intention to have a single policy objective b. create a recession c. maintain a constant rate of inflation d. resist the temptation to change its interest rate targets e. work closely with Congress and the President
At market equilibrium
A) demand equals supply. B) quantity demanded equals quantity supplied. C) surpluses are greater than shortages. D) shortages are greater than surpluses.