Suppose there are 10 apples and 10 oranges in the economy. Joe is currently consuming 4 apples and 5 oranges, and Jane is consuming 6 apples and 5 oranges
At this allocation, Joe's marginal utility of apples is 3, and his marginal utility of oranges is 5. Jane's marginal utility of apples is 6, and her marginal utility of oranges is 10. If the current price of apples is $4 and the current price of oranges is $5, then there is an: A) excess demand for apples and an excess supply of oranges.
B) an excess demand for oranges and an excess supply of apples.
C) equilibrium in the market with no excess supply or demand for either good.
D) an excess supply of apples and oranges.
B
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The situation in which short-term interest rates are pushed to zero, leaving the central bank unable to lower them further is known as
A) an interest rate panic. B) the Taylor rule. C) a zero-sum game. D) a liquidity trap.
If you purchase a Treasury bond, the Treasury bond is
A) an asset to you as well as an asset to the U.S. government. B) an asset to you, but a liability to the U.S. government. C) a liability to you, but an asset to the U.S. government. D) a liability to you as well as a liability to the U.S. government.
A temporary decrease in taxes leads to
A) a small increase in current consumption. B) a large increase in current consumption. C) a small decrease in future consumption. D) a large decrease in future consumption.
A common feature(s) of the early years of transition
a. Recession b. Hyperinflation c. Creation of democracy d. Macroeconomic stability e. A and b