A rational consumer will always shift a dollar from a good for which the marginal-utility- to-price ratio is lower to one for which the marginal-utility-to-price ratio is higher
Indicate whether the statement is true or false
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If the government taxes producers that create pollution, the government's policy
A) allows the producers to pollute more by increasing their costs. B) results in less production because the producers' costs have risen. C) eliminates pollution entirely by shifting the supply curve leftward. D) allows the firms to pass along higher costs but doesn't cut pollution. E) forbids the firms from passing along higher costs.
Assuming no change in the nominal exchange rate, how will a higher rate of inflation in the United States relative to France affect the real exchange rate between the two countries? (Assume the United States is the "domestic" country.)
A) The real exchange rate will rise. B) The real exchange rate will be unaffected. C) The real exchange rate will fall. D) The impact on the real exchange rate cannot be predicted.
Suppose marginal propensity to consume (MPC) is 0.7 and there is a $100 increase in autonomous consumption. Given this information, real GDP will increase by
A. $143. B. $333. C. $1,000. D. $700.
Most economists attribute the Great Moderation experienced in the United States during the 1990s mainly to:
A. better understanding and use of monetary policy. B. aggressive fiscal policy. C. slowing productivity growth. D. good fortune.