The law of diminishing marginal utility may be illustrated by a person
a. buying additional goods after getting a pay raise
b. eating more twinkies but enjoying them less
c. giving some of income to a needy person
d. who spends more hours studying than do his fellow students
e. buying goods so long as their marginal utility is greater than zero
B
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If the real interest rate
A) falls, there is a movement along the supply curve of loanable funds to a lower quantity of loanable funds . B) rises, the supply of loanable funds curve shifts leftward. C) rises, the supply of loanable funds curve shifts rightward. D) falls, there is a movement along the supply of loanable funds curve to a higher quantity of saving. E) falls, the supply of loanable funds curve shifts leftward.
If consumers experience an increase in lifetime income, current spending will ________, current saving will ________, and future spending will ________
A) increase; increase; increase B) increase; decrease; decrease C) increase; decrease; increase D) increase; increase; decrease E) decrease; increase; increase
What do economists mean when they characterize households and firms as forward looking?
What will be an ideal response?
Fighting inflation by slowing the growth of aggregate demand is
a. endorsed by most politicians. b. a convenient way to reduce inflation. c. unpopular with politicians. d. always easily accepted by firms and workers.