According to economic theory, a politician
A) expands activities whose marginal benefit exceeds marginal cost.
B) contracts activities whose marginal cost exceeds marginal benefit.
C) does not necessarily act on narrow or selfish interests.
D) does all of the above.
E) does none of the above.
D
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The interest rate that banks use as a reference point for interest rates on a wide range of loans to businesses and individuals is the ________.
A. discount rate B. prime rate C. term auction rate D. real interest rate
If a good is price elastic, a decrease in price will:
A) decrease total revenue. B) increase total revenue. C) not affect revenue. D) none of the above.
If the economy is experiencing an inflationary GDP gap, ___ monetary policy might be used to ____ aggregate demand and ____ the overall price level.
A. expansionary; decrease; decrease B. expansionary; increase; decrease C. contractionary; decrease; decrease D. contractionary; decrease; increase
Is increased production of a good beneficial to society?
a. Yes, because scarcity is such an overriding concern. b. Yes, because more is always better. c. Maybe, it depends on what is foregone. d. No, because increased production does not increase utility.