The Federal Reserve expanded their traditional tools set in the 2007-2009 recession to include
A. government spending policies.
B. tax rate changes.
C. the purchase of corporate paper.
D. labor regulations.
Answer: C
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A consumer makes purchases of an existing product A such that the marginal utility is 40 and the price is $20. The consumer also tries a new product B and at the current level of consumption it has a marginal utility of 72 and a price of $24. What does
the utility-maximizing rule suggest that this consumer should do? What will be an ideal response?
Positive economics is:
A. more objective than normative economics. B. more subjective than normative economics. C. neither objective nor subjective. D. subjective.
According to the classical model, real wages should
A) remain constant. B) fall during recessions. C) rise during recessions. D) stay the same during recessions but rise during expansions.
According to the text, the actual M2 multiplier in the United States today is
A) about 5. B) between 1.0 and 2.0. C) negative. D) over 10.