Which of the following would encourage economic growth through increases in the capital stock?
A) an increase in household saving
B) a decrease in the government deficit
C) a change from an income tax to a consumption tax
D) all of the above
D
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Which of the following changes will cause a downward movement along the demand curve for reserves?
A) A decrease in deposits held by banks B) A decrease in the federal funds rate C) An increase in deposits held by banks D) An increase in the federal funds rate
The law of diminishing marginal utility explains why
A. most individual demand curves are straight lines. B. the consumer’s optimal purchase is at the tangency of an indifference curve and the budget line. C. most individual demand curves slope downward. D. marginal utility falls when total utility falls.
Open market sale of government securities by the Fed decreases the federal funds rate
Indicate whether the statement is true or false
Which of the following statements about positive economic analysis is false?
A) Positive analysis uses an economic model to estimate the costs and benefits of different course of actions. B) There is much more disagreement among economists over normative economic analysis than over positive economic analysis. C) There is much more disagreement among economists over positive economic analysis than over normative economic analysis. D) Unlike normative economic analysis, positive economic analysis can be tested.