If a consumer is initially at an optimum, and then the price of Y decreases, then
A. MUX/PX = MUY/PY.
B. MUX/PX < MUY/PY.
C. MUX/MUY < PY/PX.
D. MUX/PX > MUY/PY.
Answer: B
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What will be an ideal response?
Cost-push inflation is due to:
a. raw material cost increases. b. energy cost increases. c. All of the answers are correct. d. labor cost increases.
Refer to the graph. An increase in the Security Market Line from SML 1 to SML 2 and an increase in the average expected rate of return of asset A from Y 1 to Y 2 would be explained by:
A. arbitrage only.
B. a restrictive monetary policy only.
C. both arbitrage and a restrictive monetary policy.
D. neither arbitrage nor a restrictive monetary policy.
When a U.S. agribusiness company sells 10,000 units of cow vaccine to a company in France, this transaction will represent a:
A. Credit on the current account of the U.S. balance of payments B. Debit on the current account of the U.S. balance of payments C. Credit on the financial account of the U.S. balance of payments D. Debit on the financial account of the U.S. balance of payments