Answer the following statement(s) true (T) or false (F)
1. A normative criteria is a way of balancing benefits against costs.
2. Consumer's surplus equals the total value that the consumer places on his purchases minus the amount he actually paid.
3. A consumer's demand curve for pizza is identical to his total value curve for pizza.
4. Market demand always represents marginal value.
5. Social or welfare care is consumer surplus minus producer surplus.
1. True
2. True
3. False
4. False
5. False
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A system of accounts that measures the transactions of goods, services, income, and financial assets between domestic households, businesses, and governments and residents of the rest of the world during a specific time period is the
A) capital account. B) current account. C) balance of payments. D) balance of trade.
Assume the government decides to reduce spending in order to reduce the budget deficit, which it financed by borrowing in the real credit market. Where and how should you begin your analysis when analyzing the chain reaction of economic interactions?
a. Start the analysis in the real credit market with demand for real credit shifting to the right. b. Start the analysis in the real goods market with aggregate demand shifting to the left. c. Start the analysis in the real goods market with aggregate supply shifting to the left. d. Start the analysis in the real goods market with aggregate supply shifting to the right. e. Start the analysis in the real credit market with demand for real credit shifting to the left.
If the reserve ratio is 8 percent, then the money multiplier is
a. 12.5. b. 11.5. c. 13.5. d. 8.
Compared to the distribution of money income, the distribution of wealth is
A) about the same. B) much more equal. C) much less equal. D) a little more equal.