If we compare budget constraint A to budget constraint B in the graph shown, what can be said of the relative prices reflected in the two?
This graph shows three different budget constraints: A, B, and C.
A. Because A is steeper, soda is relatively less expensive in A than in budget constraint B.
B. Because B is steeper, soda is relatively less expensive in A than in budget constraint B.
C. Because B is flatter, soda is relatively more expensive in A than in budget constraint B.
D. Because A is flatter, soda is relatively more expensive in A than in budget constraint B.
A. Because A is steeper, soda is relatively less expensive in A than in budget constraint B.
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The Fed conducts an open market purchase of securities of $5,000. If the currency drain ratio is 0 percent and the desired reserve ratio is 10 percent, then the total increase in the quantity of money is
A) $4,000. B) $5,000. C) $20,000. D) $50,000. E) $10,000.
The difference between quantity restrictions and price ceilings as to their effect on the market is that
A) only price ceilings make the market inefficient. B) only quantity restrictions make the market inefficient. C) while some consumers gain from price ceilings, no consumers gain from quantity restrictions. D) while price ceilings are efficient, quantity restrictions are not.
Maximizing profits per unit always leads to the maximization of total profit.
Answer the following statement true (T) or false (F)
Answer the following questions true (T) or false (F)
1. If prices rise on average in the U.S. economy, the purchasing power of a dollar declines. 2. Using "chain-weighted" prices to calculate real GDP remedies the distortions causes by changes in relative prices over time. 3. If the GDP deflator is equal to 100, then for that year nominal GDP is equal to real GDP.