The production possibilities curve tells us:
A. the specific combination of two products that is most desired by society.
B. that costs do not change as society varies its output.
C. that costs are irrelevant in a society that has fixed resources.
D. the combinations of two goods that can be produced with society's available resources.
Answer: D
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The slope of the indifference curve between steak and lobster is always equal to the ratio of their prices
Indicate whether the statement is true or false
The greater the consumer's reluctance to shift brands, the lower the price elasticity of demand
a. True b. False Indicate whether the statement is true or false
If the Fed conducts an open market purchase of bonds, which of the following will happen?
a. The interest rate will decrease, the aggregate expenditure line will shift upward, and the aggregate demand curve will shift leftward. b. The interest rate will increase, the aggregate expenditure line will shift upward, and the aggregate demand curve will shift rightward. c. The interest rate will decrease, the aggregate expenditure line will shift upward, and the aggregate demand curve will shift rightward. d. The interest rate will decrease, the aggregate expenditure line will shift downward, and the aggregate demand curve will shift rightward. e. The interest rate will increase, the aggregate expenditure line will shift downward, and the aggregate demand curve will shift leftward.
Why is it difficult for policy makers to rely on the theoretical discussion of the money multiplier to target the money supply?
A. The equation of exchange has been proven to be wrong. B. There is no good measure of reserves in the economy. C. The use of quantitative easing has made it impossible to accurately determine the money supply. D. The amount of excess reserves and cash in the system varies.