Demand-pull inflation could start with
What will be an ideal response?
increases in government purchases followed by increases in money wage rates
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Answer the following statement(s) true (T) or false (F)
1. If the consumer chooses not to purchase potatoes, then the marginal value of potatoes must be less than or equal to the relative price of potatoes. 2. The steeper the indifference curve, the greater the marginal value of a good. 3. If a person is willing to trade one good for another, their new basket after the trade must lie on a lower indifference curve than their original basket. 4. Along a convex indifference curve, the marginal value of a good rises as the quantity of the good rises. 5. When using the composite good convention all other goods are measured in terms of dollars.
Refer to Figure 15-6. In the figure above, if the economy is at point A, the appropriate monetary policy by the Federal Reserve would be to
A) raise income taxes. B) raise interest rates. C) lower income taxes. D) lower interest rates.
Describe the properties of a progressive tax and illustrate with an example
What will be an ideal response?
Two products are perfect substitutes if:
A. a consumer is willing to swap one for another at a fixed rate. B. they are valuable only when used together in fixed proportions. C. their indifference curves are L-shaped. D. an increase in the price of one good causes a decrease in the demand for the other good.