If a budget deficit increases interest rates, it is possible that investment will
A. fall, leading to a larger capital stock.
B. fall, so that there is a smaller capital stock.
C. rise, because investment is directly related to interest rates.
D. rise, because investment is more attractive when interest rates are higher.
Answer: B
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Which of the following affects the amount of money a person is willing to hold?
A) The use of credit cards increases. B) The price level rises from 103 to 107. C) The interest rate that you earn on your savings account increases. D) All of the above are correct.
The primary reason why a monopoly can make a long-run economic profit is the existence of
A) barriers to entry. B) inelastic demand. C) price discrimination. D) many buyers.
According to the rational expectations theory, monetary policy is fully anticipated and therefore only affects: a. the level of real GDP
b. the level of real investment. c. the price level. d. the level of real consumption. e. the level of exports.
What's the relationship between total utility (TU) and marginal utility (MU)?
a. MU of a good is the sum of its TU, assuming that TU is positive b. MU is the change in TU divided by the change in quantity c. MU is TU divided by the quantity of goods consumed d. TU of a good is the sum of all changes in the MUs of that good e. MU = TU as long as the change in TU is constant