Which of the following is true?
A. If high inflation and sluggish growth have the same cause, they will show up in the economic data at the same time.
B. Sluggish growth may show up in economic data before high inflation, even if the two have the same cause.
C. High inflation may show up in economic data before sluggish growth, even if the two have the same cause.
D. If high inflation and sluggish growth have different causes, they cannot show up in the economic data at the same time.
Ans: C. High inflation may show up in economic data before sluggish growth, even if the two have the same cause.
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The MU/P equalization principle means consumers will spend their income (budget) so that the MU/P ratio of the goods consumed is
a. zero for each good b. higher for goods the consumer wants the most (highest marginal utility) c. maximized for the goods the consumer wants the most (highest marginal utility) d. higher than TU/P e. the same for each good
Refer to the payoff matrix below.Player 1Player 2??t1t2t3?S120,015,15,-100?S220,20010,05,-50Which of the following pairs of strategies constitutes a Nash equilibrium of the game?
A. S1, t2 and S2, t1 B. S1, t1 C. S1, t2 D. S2, t1
The transactions demand for money
A. varies inversely with nominal Gross Domestic Product (GDP). B. varies directly with nominal Gross Domestic Product (GDP). C. varies negatively with nominal Gross Domestic Product (GDP). D. is unrelated to nominal Gross Domestic Product (GDP).
If the government wanted to efficiently limit the emission of carbon monoxide by all firms to exactly 4 million tons it could
A) issue rights to pollute worth 4 million tons and let the firms trade those rights in a market. B) appeal to firms' environmental conscience to pollute less. C) subsidize production. D) rely on the Coase Theorem.