Resource use is allocatively efficient when marginal benefit is
A) greater than marginal cost.
B) equal to marginal cost.
C) less than marginal cost.
D) at its maximum value.
B
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Fiat money has
A) a great intrinsic value that is independent of its use as money. B) little to no intrinsic value and is authorized by the central bank or governmental body. C) value, because it can be redeemed for gold by the central bank. D) little to no intrinsic value but is backed by the quantity of gold held by the central bank.
The additional benefit to a consumer from consuming one more unit of a good or service
A) is equal to economic surplus. B) is equal to marginal benefit. C) is equal to the opportunity cost of consuming the good or service. D) is equal to consumer surplus.
Assume that seigniorage and the government's primary deficit are both zero
If the real interest rate is less than the growth rate of real GDP, fiscal policy ________, and if the real interest rate is greater than the growth rate of real GDP, fiscal policy ________. A) is sustainable; may be sustainable B) is unsustainable; is sustainable C) is sustainable; is unsustainable D) is unsustainable; may be sustainable
Based on these graphs, if a tax cut has a small effect on the SRAS but a large effect on AD, ______.
a. the price level will increase
b. RGDP will not change
c. RGDP will decrease
d. the price level will decrease