Why is deflation such a problem for consumption and investment?
A. It increases the rate of both.
B. It causes firms and households to spend more.
C. It slows both.
D. It slows investment while simultaneously increases consumption.
Answer: C
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Allocative efficiency occurs when it is
A) possible to produce more of one good without giving up the production of some other good. B) possible to produce more of all goods. C) not possible to produce more of one good without giving up the production of some other good that is valued less highly. D) not possible to produce more of one good without giving up the production of some other good that is valued more highly.
How does the liquidity premium theory explain an upward sloping yield curve during normal economic times?
What will be an ideal response?
If marginal costs are virtually zero after initial units are produced
A) inventors need to sell lots of units to make money. B) inventors need to be paid upfront. C) inventors need to sell their patents. D) none of these choices.
Describe the difference between a microeconomic demand curve and an aggregate demand curve