The consumer's optimum is where
a. MUx/MUy = Py/Px.
b. MUx/Py = MUy/Px.
c. MUx/MUy = Px/Py.
d. None of the above is correct.
c
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Market income in the United States is distributed
A) more unequally than income after taxes and benefits. B) less unequally than income after taxes and benefits. C) the same as income after taxes and benefits. D) according to a big tradeoff between equity and equality
It is true that __________ changes in velocity cause __________ changes in real GDP
A) small; no B) large; no C) small; large D) large; small
In macroeconomic analysis, the representative consumer
A) denotes the consumer with the average amount of income. B) plays the role of a stand-in for all consumers in the economy. C) is the consumer who bargains with firms for all workers in the economy. D) is always a misleading fiction.
Refer to the above figure. Suppose that the economy initially is operating along AD1
If the government seeks to close the recessionary gap by raising government spending without any change in taxation, which moves the aggregate demand curve from AD1 to AD2, then to AD3. Which of the following scenarios is TRUE? A) Interest rates fall and investment rises. B) Both interest rates and investment fall. C) Both interest rates and investment rise. D) Interest rates rise and investment falls.