Suppose a consumer is currently buying 5 goods so that utility is maximized. The price of one of the goods falls while the prices of the other 4 goods do not change. The consumer should
A. buy less of all goods being consumed to get to the optimal position.
B. buy more of the good that has experienced the fall in price to get to the optimal position.
C. buy more of all goods being consumed to get to the optimal position.
D. buy more of all of the goods but the one that experiences the decline in price, to get to the optimal position.
Answer: B
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In 2009, the Social Security System ran a surplus of approximately $137 billion.
Answer the following statement true (T) or false (F)
Suppose the Fed bought $150 million of U.S. securities from security dealers. The reserve requirement is 20 percent, and there are no initial excess reserves. A few weeks later, if the public's holdings of currency are constant and the banks have loaned all excess reserves, the money supply will increase by:
a. $150 million. b. $300 million. c. $600 million. d. $750 million.
The MPC for a country will likely be measured as less than 1.0.
Answer the following statement true (T) or false (F)
Refer to the information provided in Figure 27.3 below to answer the question(s) that follow.
Figure 27.3Refer to Figure 27.3. Assume the economy is currently at Point A on aggregate supply curve AS1. An increase in inflationary expectations that causes firms to increase their prices
A. moves the economy to Point B on aggregate supply curve AS1. B. moves the economy to Point C on aggregate supply curve AS1. C. shifts the aggregate supply curve to AS0. D. shifts the aggregate supply curve to AS2.