The combination of two goods at which total utility is maximized must lie somewhere on the consumer's budget line
a. True
b. False
A
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If unemployment is below its natural rate, what happens to move the economy to long-run equilibrium?
a. Inflation expectations rise which shifts the short-run Phillips curve to the right. b. Inflation expectations rise which shifts the short-run Phillips curve to the left. c. Inflation expectations fall which shifts the short-run Phillips curve to the right. d. Inflation expectations fall which shifts the short-run Phillips curve to the left.
A higher exchange rate value of the dollar reduces inflation but has a contractionary effect on the economy.
Answer the following statement true (T) or false (F)
One disadvantage of commodity money is that
A) it cannot be readily converted to gold. B) its quantity can fluctuate erratically C) its value does not change. D) it has no value apart from its use as money.
If the nominal interest rate is below the equilibrium value, then the quantity demanded of money is ________ than the quantity supplied of money, bond prices will ________, and the nominal interest rate will ________.
A. less; fall; increase B. greater; fall; increase C. greater; rise; increase D. greater; fall; decrease