When marginal utility of consuming a good is zero, total utility is:
A. zero.
B. decreasing.
C. increasing.
D. at its maximum.
Answer: D
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If the Fed expects currency holdings to rise, it conducts open market ________ to offset the expected ________ in reserves
A) purchases; increase B) purchases; decrease C) sales; increase D) sales; decrease
Changes in inventory investment are ________ for the Fed to use to time changes in monetary policy
A) too short-lived B) short-lived enough C) gradual enough D) too gradual
Which of the following is necessary for the invisible hand of market prices to work properly?
a. buyers and sellers who generally tend to disregard their own self-interest b. democratic political procedures and highly regulated markets c. price controls that restrict the movement of market prices d. competition and property rights that are well-defined and enforced
The GDP deflator is designed to
a. adjust nominal GDP for changes in the unemployment rate. b. adjust nominal GDP so as to include the problem of externalities. c. adjust nominal GDP for changes in the price level. d. calculate changes in the price of food and other consumer goods.