If two consumption bundles lie on the same indifference curve, then:
A. the consumer prefers the bundle that is farthest from the origin.
B. the consumer does not prefer one bundle over the other.
C. the consumer prefers the bundle that is farthest to the right on the indifference curve.
D. the consumer prefers the bundle that is farthest to the left on the indifference curve.
B. the consumer does not prefer one bundle over the other.
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The magnitude of the slope of the budget line measures the
A) opportunity cost of the good on the horizontal axis in terms of the good on the vertical axis. B) opportunity cost of the good on the vertical axis in terms of the good on the horizontal axis. C) price elasticity of demand. D) price elasticity of supply.
Consider the two graphs above. Suppose that the domestic currency is expected to strengthen. This would ________ the desired level of the capital stock, as depicted in graph ________
A) increase; B B) increase; A C) decrease; B D) decrease; A
What will be the result in a growing economy if increases in aggregate demand outpace rightward shifts of the long-run aggregate supply curve?
A) secular deflation B) inflation accompanied by declines in real GDP C) inflation accompanied by increases in real GDP D) a decline in consumption spending
A business cycle is the period of time in which:
a. expansion and contraction of economic activity are equal. b. the price level changes. c. a business is established and ceases operations. d. there are four phases which are: peak, recession, trough and recovery.