The term ______ is used to describe the common pattern whereby each marginal unit of a consumed good provides less of an addition to utility than the previous unit.
A. marginal utility pattern
B. marginal income utility
C. diminishing marginal utility
D. decreasing marginal utility
Answer: C. diminishing marginal utility
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In which of the following market structures does free entry and exit play an important role in the long-run equilibrium outcome? (i) perfect competition (ii) monopolistic competition (iii) monopoly
a. (i) only b. (i) and (ii) only c. (ii) and (iii) only d. (i), (ii), and (iii)
According to the Taylor rule:
a. if inflation falls by 1 percentage point below its target of 2 percent, then the Fed should raise the real federal funds rate by one-half a percentage point. b. all of these are appropriate Fed actions. c. when real GDP is equal to potential GDP and inflation is equal to its target of 4 percent, the federal funds rate should be kept at 2 percent. d. if real GDP rises by 2 percent above potential GDP, the Fed should raise the real federal funds rate by 1 percentage point.
Which of the following is a microeconomic question?
A. Should the government decrease unemployment benefits to reduce the unemployment rate? B. Why do some countries have higher inflation rates than other countries? C. Should the government subsidize corn farmers to encourage the production of ethanol? D. Should congress decrease taxes to help stimulate the economy?
If the marginal leakage rate is 0.2, then a $300 fall in autonomous planned expenditures will shift the IS curve leftward by the amount of
A) $300. B) $1500. C) $75. D) $600.