According to the law of diminishing marginal utility, the marginal utility for a particular product
A) remains constant, regardless of how much of the product is consumed.
B) remains constant as long as the product is still considered useful.
C) decreases as more of the product is consumed.
D) increases as more of the product is consumed.
Answer: C
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Contractionary monetary policy will result in
A) higher interest rates. B) increased rates of inflation. C) a leftward shift in the long-run Phillips curve. D) an upward shift in the short-run Phillips curve.
The alteration of exchange rates to move the economy to internal and external balance may lead to all EXCEPT
A) a balance of payments crisis. B) changes in the terms of trade. C) changes in the level of imports or exports. D) changes in interest rates. E) a guaranteed unilateral improvement in economic wealth.
Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real GDP and net nonreserve-related borrowing/investing in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. Real GDP remains the same and net nonreserve-related borrowing/investing becomes more negative (or less positive). b. Real GDP rises and net nonreserve-related borrowing/investing becomes more negative (or less positive). c. Real GDP falls and net nonreserve-related borrowing/investing becomes more positive (or less negative). d. Real GDP and net nonreserve-related borrowing/investing remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
A decrease (leftward shift) in the supply for a good will tend to cause
a. an increase in the equilibrium price and quantity b. a decrease in the equilibrium price and quantity c. an increase in the equilibrium price and a decrease in the equilibrium quantity d. a decrease in the equilibrium price and an increase in the equilibrium quantity e. none of the above.