The utility maximizing consumption bundle for an individual can be found by locating _____
a. the individual's bliss point
b. any point on an indifference curve touching the budget constraint
c. the highest point on an individual's indifference curve
d. the point tangent to an individual's budget constraint
d
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The best measure of the income households actually have available to spend is
A) national income. B) disposable personal income. C) personal income. D) net national income.
Because many emerging market countries have not developed the political or monetary institutions that allow the successful use of discretionary monetary policy
A) they have little to gain from pegging their exchange rate to an anchor country like the U.S. or Germany. B) they have little to gain from using a nominal anchor, because it would mean a monetary policy that is overly expansionary. C) they have very little to gain from an independent monetary policy, but a lot to lose. D) they would be better off giving their central bankers the independence to use discretion, rather than take their discretion away through any nominal anchor.
The term "marginal analysis" refers to comparing the benefits and costs of choosing a little more or a little less of a good
a. True b. False Indicate whether the statement is true or false
In the circular flow model, profits are considered to be
A) a cost of doing business. B) equal to zero, or else the circular flow would be out of balance. C) a subtraction from the Gross Domestic Product (GDP). D) a form of interest payment.