The role that prices play in distributing scarce goods and services to those consumers who value them the most highly is known as the ________ function of price.
A. multiplicative
B. allocative
C. rationing
D. equilibrium
Answer: C
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Which of the following best describes supply-side economics?
A) Education affects the incentive to work, save, and invest and, therefore, aggregate supply. B) Tax rates, particularly marginal tax rates, affect the incentive to work, save, and invest and, therefore, aggregate supply. C) Labor productivity affects aggregate supply. D) Education affects labor productivity which affects aggregate supply.
As the average annual inflation rate ________, the volatility of inflation tends to ________
A) decreases; increase B) increases; increase C) increases; remain stable D) decreases; remain stable
Marginal utility measures:
A) the slope of the indifference curve. B) the additional satisfaction from consuming one more unit of a good. C) the slope of the budget line. D) the marginal rate of substitution. E) none of the above
If business fluctuations are from demand-side forces,
a. monetary and fiscal policy will move inversely. b. interest rates and budget deficits will move inversely. c. unemployment and inflation will move inversely. d. unemployment and budget deficits will move inversely.