What phrase do economists use to describe the assumption that everything else about a situation stays the same, allowing only one variable, such as price, to change?
A. Caveat emptor
B. Vini, vidi, vici
C. Ceteris paribus
D. E pluribus unum
Answer: C
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Joe has $50, which he spends on movies and pizza. If the price of a pizza falls, Joe can
A) consume more of both goods. B) consume more pizza only if he gives up some movies. C) consume more movies only if he gives up some pizza. D) consume more pizza only.
The ultimate objective of macroeconomics is to: a. reduce the unemployment rate in an economy
b. stabilize the growth rate in an economy. c. develop and test theories about how the overall economy works. d. improve the international competitiveness of U.S. financial markets. e. maximize the efficiency of government intervention in the marketplace.
A third party is:
a. the party to which a contractual agreement is meant to benefit. b. a person, or persons, who are unintentionally affected by a market transaction. c. the third person in a three-way contract. d. the person who owns the property right in a contract. e. when the government attempts to mediate a dispute between management and labor.
Along the upward-sloping segment of the aggregate supply curve,
a. when real GDP increases, the price level rises b. when real GDP increases, the price level does not change c. when real GDP decreases, the price level rises d. when real GDP increases, the price level falls e. no relationship exists between changes in real GDP and changes in the price level