The most important reason for the slope of the aggregate-demand curve is that as the price level
a. increases, interest rates increase, and investment decreases.
b. increases, interest rates decrease, and investment increases.
c. decreases, interest rates increase, and investment increases.
d. decreases, interest rates decrease, and investment decreases.
a
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A graph of total fixed cost
a. is a downward sloping line. b. is a straight horizontal line. c. is an upward sloping line. d. has a U-shape.
In the LM curve, the __________ the interest-sensitivity of liquidity preference, the __________ the necessary increase in the rate of interest to restore equilibrium
A) greater; smaller B) greater; greater C) smaller; smaller D) None of the above.
The law of diminishing marginal utility means that: a. marginal utility is maximized when consumers get the same amount of total utility from every good they consume. b. total utility is maximized when consumers get the same amount of marginal utility from the last unit of every good they consume. c. beyond some point, added units of a product provide lower and lower amounts of marginal
utility. d. a consumer would get less utility from the last unit of a good consumed when that good costs $3 than when it costs $1.
A person has a comparative advantage in an activity whenever she
A. can perform the activity at a lower opportunity cost than another person can. B. can do the activity in less time than anyone else. C. has an absolute advantage in the activity. D. can do everything better than anyone else.