The consumer optimum is defined as
A. the set of goods and services that maximizes marginal utility for each good.
B. the set of goods and services, subject to the limited income of the consumer, that maximizes the total utility of the consumer.
C. the set of goods and services such that the marginal utility of each good equals zero.
D. the set of goods and services that maximizes the marginal utility of each good consumed.
Answer: B
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If the federal government tries to make fiscal policy sustainable by increasing seigniorage, the economy would experience ________ and will result in ________ potential GDP
A) a decrease in the growth rate of the money supply; lower B) an increase in the growth rate of the money supply; higher C) an increase in inflation; lower D) a decrease in the real interest rate; higher
The Malthusian model predicts that
A) population will keep increasing. B) the standard of living will keep increasing. C) health improvements increase the standard of living. D) population control improves the standard of living.
To maximize profit, manufacturers should set the ________ resale price that ________ the retailers' cost of providing product-specific services.
A) minimum; covers B) minimum; does not cover C) maximum; does not cover D) maximum; covers
If the legal reserve requirement is 10 percent, $1,000 cash deposited into a demand deposit account will generate, assuming willing borrowers, an increase in the money supply of
a. $900 b. $1,100 c. $9,000 d. $10,000 e. $11,000