Grace has just eaten a slice of pizza and says it gave her a utility of 8. If she chooses to eat a second slice:
A. she is not acting rationally.
B. she will experience an increase in total utility.
C. she will experience a drop in total utility.
D. None of these is true.
Answer: B
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Most firms have
a. no monopoly pricing power. b. some monopoly pricing power. c. absolute monopoly pricing power. d. the ability to earn monopoly profits.
The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
The velocity of circulation is
A) the relationship between income and spending. B) the relationship between increases in income and investment. C) the ratio of currency to demand deposits. D) the average number of times per year a dollar is spent on goods and services in GDP.
Exhibit 5-6Use the table below to answer the following question(s). Nominal GDP GDP Year(billions) deflator Year 1 600 100.0 Year 21,000 133.3 Refer to Exhibit 5-6. Between Year 1 and Year 2, the general level of prices increased by approximately:
A. 16.7 percent. B. 33.3 percent. C. 66.7 percent. D. 133.3 percent.