The marginal rate of substitution is:
a. the total amount a consumer is willing to trade to get another good
b. the rate at which the consumer is willing to trade one good to gain one more unit of another good.
c. is reflected by the slope of the indifference curve.
d. characterized by both b. and c.
d
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Contractionary monetary policy should initially change gross investment by ________.
A. enough to reach full employment B. more than necessary to reach full employment C. an amount determined by the money multiplier D. less than necessary to reach full employment
Government economic policies are designed to have the biggest impact on _____
a. cyclical unemployment b. frictional unemployment c. structural unemployment d. seasonal unemployment
A problem with the CPI is the presence of a substitution bias on the behalf of consumers
Indicate whether the statement is true or false
What is the most important contrast between the segmented markets theory and the expectations theory?
A) The expectation theory states that investors view similar assets that differ only with respect to maturity as perfect substitutes. B) The segmented markets theory states that investors view similar assets that differ only with respect to maturity as perfect substitutes. C) The expectations theory does a better job of explaining why yield curves typically are upward-sloping. D) The segmented markets theory does a better job of explaining why yields on instruments of different maturities tend to move together.