If toast and butter are complements, then which of the following would increase the demand for toast?
a. a decrease in the price of toast
b. a decrease in the price of butter
c. an increase in the price of butter
d. Both a and b are correct.
b
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Cash payments are generally preferable to in-kind payments when the utility of the transfer recipient is the only criterion because _____
a. it is cheaper to distribute in-kind benefits b. cash is necessary for utility maximization c. recipients know their utility functions better than anyone else d. of diminishing marginal utility
If an economy is operating at a point outside the PPC, either the society has resources that are not being fully used or production is not efficient
a. True b. False Indicate whether the statement is true or false
Which of the following is the relationship between the required reserve ratio (RRR) and the demand deposit multiplier?
a. The demand deposit multiplier = 1/RRR b. The demand deposit multiplier = RRR ? change in reserves c. The demand deposit multiplier = 1/(1 + RRR) d. RRR = demand deposit multiplier e. The demand deposit multiplier = 1/(1 - RRR).
Frictional unemployment occurs when: a. a recent graduate is searching for his first job
b. a ski instructor is looking for a part-time job during summer. c. an engineer is looking for a new job after a recession. d. a stenographer is looking for a new job as his skills have become obsolete in the current labor market.