Contractionary monetary policy _____ consumption and _____ investment spending.
a) increases; increases
b) decreases; increases
c) increases; decreases
d) decreases; decreases
Ans: d) decreases; decreases
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If we compare the CPI to a perfect cost of living index, we find that they are
A) different because the CPI does not measure prices. B) the same thing. C) not the same because the CPI has a fixed reference base period. D) different because the CPI uses a fixed basket and has some measurement difficulties. E) different because the cost of living has nothing to do with prices.
According to the BEA, in the second quarter of 2012 purchases of new residential structures rose by 8.9 percent. Using the expenditure approach, this change increases
A) gross private domestic investment. B) government expenditure on goods and services. C) net exports of goods and services. D) personal consumption expenditures.
Suppose that a worker in Country A can make either 25 bananas or 5 tomatoes each year. Country A has 200 workers. Suppose a worker in Country B can make either 18 bananas or 6 tomatoes each year. Country B has 400 workers. The opportunity cost of one tomato in Country B is:
A. 6 bananas. B. 108 bananas. C. 3 bananas. D. 18 bananas.
Using the above table, what is the total utility of consuming 2 bottles of soda?
A. 140 B. 120 C. 240 D. 115