The largest component of aggregate demand is
A. investment spending.
B. consumer spending.
C. government spending.
D. net exports.
Answer: B
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In an open economy under flexible exchange rates and represented by the IS-LM-IP model, a reduction in government spending will cause a reduction in which of the following?
A) net exports B) the exchange rate, E C) exports D) all of the above E) none of the above
As this chapter explains, the movie A Beautiful Mind is a biography of John Nash
There is a scene in the movie where the John Nash character (played by Russell Crowe) is at a bar with several friends and has the insight that becomes what we now call a Nash equilibrium. Here is a game that summarizes what happened in that scene. Several women enter the bar; one of the women is very beautiful. All of the men would prefer to dance with the beautiful woman. They know that if one man asks the beautiful woman to dance that she will accept but that if two of the men ask her to dance she will refuse to dance with either of them. The John Nash character argues that none of the men should ask the beautiful woman to dance but should instead ask the other women. Do you think the director of this movie has studied game theory?
International trade between two nations increases the standard of living of both nations due to
A) specialization and gains from absolute advantage. B) specialization and gains from comparative advantage. C) high tariffs. D) political intervention.
Elijah has just eaten his second popsicle. Using the concept of marginal utility, we can say:
A. the utility he will gain from his third will reduce his total utility. B. the utility he will gain from his third will not reduce his total utility. C. the utility he will gain from his third will be less than that of his second but will increase his total utility. D. the utility he will gain from his third will be less than that of his second and may reduce his total utility.