An interior solution to a consumer's utility maximization problem implies _________. (Select all that are true.)
the goods are perfect substitutes
consuming more than an optimal amount of at least one good.
consuming a positive amount of all goods.
spending all income.
spending less than full income.
the goods are imperfect substitutes
consuming a positive amount of one good and zero of the other good.
consuming a positive amount of all goods.
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If there are economies of scale in the transactions demand for money, as income increases, money demand
A) increases proportionately. B) increases less than proportionately. C) increases more than proportionately. D) does not change.
The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
An increase in the time to the promised future payment ________ the present value of the payment
A) decreases B) increases C) has no effect on D) is irrelevant to
Hiring a white worker may be statistically safer for the employer than hiring a minority
Indicate whether the statement is true or false