For two goods, A and B, the rational spending rule is expressed as:
A. MUA = MUB.
B. (MUA/PA) = (MUB/PB).
C. MUA × MUB = PA × PB.
D. (MUA/PB) = (MUB/PA).
Answer: B
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According to Monetarists, a direct substitution between cash balances and real goods results from a change in
A) investment spending. B) consumption spending. C) government spending. D) the money supply.
If the real wage is above the equilibrium real wage, there would be a ________ of workers and the real wage would ________
A) surplus; decline B) surplus; rise C) shortage; decline D) shortage; rise
All of the following are examples of goods for which external costs commonly exist EXCEPT
A) cigarettes. B) automobiles. C) vaccinations. D) oil transportation.
The goal of macroeconomics is to explain the economic changes that affect many households, firms, and markets simultaneously
a. True b. False Indicate whether the statement is true or false