What is the largest component of spending in the United States?
A) consumption spending
B) investment spending
C) government purchases
D) net investment spending
Answer: A
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
The price elasticity of demand is defined as
a. the absolute change in price divided by the absolute change in quantity demanded. b. the absolute change in quantity demanded divided by the absolute change in price. c. the percentage change in quantity demanded divided by the percentage change in price. d. the percentage change in price divided by the percentage change in quantity demanded.
A compensating differential refers to a difference in wages that arises from nonmonetary characteristics
a. True b. False Indicate whether the statement is true or false
Suppose a consumer wants to obtain the highest possible satisfaction from goods purchased on a fixed budget. Which of the following must be equal for all goods?
A. Total utility. B. Marginal utility. C. Average utility. D. Marginal utility per dollar.