The direct effect of an increase in the money supply is to
A) raise interest rates as people increase their saving.
B) decrease aggregate demand as people anticipate future economic problems.
C) increase interest rates as people anticipate higher inflation in the future.
D) increase aggregate demand as people try to spend their excess money balances.
D
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A budget constraint is:
A. a line that is composed of all the possible combinations of goods and services that maximize a consumer’s total utility. B. a line that is composed of the additional utility gained from consuming possible combinations of goods and services that a consumer can buy with his or her income. C. a line that is composed of all the possible combinations of goods and services that a consumer can buy with his or her income. D. a line that is composed of the total utility gained from consuming all possible combinations of goods and services that a consumer can buy with his or her income.
The difference between the average earnings of eye surgeons and those of janitors is an example of
a. a temporary differential b. a permanent differential c. a resource price difference that will cause a reallocation of resources to different uses d. a temporary difference that will be eliminated through the reallocation of resources to different uses e. a differential caused by a lack of resource mobility
Without product differentiation, it would be very difficult for firms to develop brand loyalty
Indicate whether the statement is true or false
The more inelastic are demand and supply, the greater is the deadweight loss of a tax
a. True b. False Indicate whether the statement is true or false