If the price of good X is $100 and the price of good Y is $40, it follows that the relative price of one unit of good Y is ___________ unit(s) of good X
A) 0.40
B) 0.20
C) 2.50
D) 4.00
E) There is not enough information to answer the question.
A
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Inflation ________.
A. reduces the buying power of people on fixed incomes B. increases the buying power of everyone's income C. reduces the buying power of everyone's income D. increases the buying power of incomes that rise more slowly than prices
The simple Keynesian model
a. overstated the effect of an increase in government spending by neglecting the necessary increase in the interest rate and consequent decline in investment that accompany an increase in government spending. b. understated the effect of an increase in government spending by neglecting the necessary increase in the interest rate and consequent decline in investment that accompany an increase in government spending. c. overstated the effect of an increase in government spending by neglecting the necessary decrease in the interest rate and consequent increase in investment that accompany a decrease in government spending. d. understated the effect of an increase in government spending by neglecting the necessary decrease in the interest rate and consequent decrease in investment that accompany an increase in government spending.
Production is efficient when
A) it generates a point beyond the production possibility curve. B) the maximum output possible is being produced given current levels of resources and technology. C) technological change occurs. D) the maximum amounts of the most important good are produced.
The division of labor helps to explain why: a. consumers need not have a deep knowledge of the goods they consume
b. consumers can only consume those goods of which they have an in-depth knowledge. c. domestic industries need protection from foreign competition. d. government intervention is required for the market to work efficiently.