If good X is a normal good and its price rises, then quantity demanded
a. may or may not fall.
b. will always fall.
c. will always rise.
d. will remain unchanged.
b
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At the unique point of consumer equilibrium, the:
a. distance between indifference curves is maximum. b. distance between the budget line and the indifference curve is maximum. c. marginal utility ratio of the two goods is equal. d. marginal rate of substitution (MRS) equals the slope of the budget line.
Which of the following is consistent with the catch-up effect?
a. The United States had a higher growth rate before 1900 than after. b. After World War II the United States had lower growth rates than war-ravaged European countries. c. Although the United States has a relatively high level of output per person, its growth rate is rather modest compared to some countries. d. All of the above are correct.
As the price level rises
a. people will want to buy more bonds, so the interest rate rises. b. people will want to buy fewer bonds, so the interest rate falls. c. people will want to buy more bonds, so the interest rate falls. d. people will want to buy fewer bonds, so the interest rate rises.
An economy is in the midst of a recession. An example of a government policy aimed at moving the economy back to potential GDP is:
a) an increase in taxes. b) an increase in government spending on infrastructure improvements. c) an increase in the poverty tax. d) a decrease in unemployment benefits.