The economizing problem is essentially one of deciding how to make the best use of:
A. Limited resources to satisfy limited economic wants
B. Unlimited resources to satisfy unlimited economic wants
C. Unlimited resources to satisfy limited economic wants
D. Limited resources to satisfy unlimited economic wants
Answer: D
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When the desired reserve ratio is 10 percent, suppose the Fed buys $1,000,000 of government securities from banks. As a result, the banks' excess reserves
A) increase by $900,000. B) increase by $1,000,000. C) increase by $10,000. D) decrease by $10,000. E) decrease by $1,000,000.
Added expenditures in the circular flow that are not paid for out of domestic resource income are known as
a. leakages. b. injections. c. imports. d. infusions.
Real disposable income is held constant when constructing a consumption function
a. True b. False Indicate whether the statement is true or false
Which of the following is a deficiency of the regular (or traditional) consumer price index (CPI) as a measure of the cost of living?
a. The CPI fails to make any adjustment for changes in the price of housing. b. The CPI only measures changes in the prices of food, clothing, and energy. c. The CPI fails to maintain the quantities of the typical bundle of goods purchased by consumers constant over a lengthy time frame. d. The CPI does not adjust regularly for the fact that consumers will shift their spending away from goods that become more expensive.