Two types of costs must be considered when selecting the optimal decision rule. They are _____ and _____
a. decision-making costs; external costs
b. marginal costs; variable costs
c. decision-making costs; political costs
d. political costs; external costs
a
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The Iranian Revolution in 1979 led to another interruption of oil supplies to the United States. This caused the reoccurrence of
a. deflation. b. full-employment. c. trade surpluses. d. stagflation.
A Keynesian economy is described by the following equations.Cd = 250 + 0.5(Y - T) - 250rId = 250 - 250rG = 300T = 300L = 0.5Y - 500r + ?eM = 3000
= 1250?e = 0(a)Calculate the values of the real interest rate, the price level, consumption, and investment for the economy in general equilibrium.(b)Now suppose government purchases increase to 350 with no change in taxes. What will be the real interest rate, the price level, output, consumption, and investment in the short run?(c)What will be the real interest rate, the price level, output, consumption, and investment in the long run?
What will be an ideal response?
If two consumption bundles lie on the same indifference curve, then:
A. the consumer prefers the bundle that is farthest from the origin. B. the consumer does not prefer one bundle over the other. C. the consumer prefers the bundle that is farthest to the right on the indifference curve. D. the consumer prefers the bundle that is farthest to the left on the indifference curve.
Which of the following is the money multiplier?
A. The required reserve ratio. B. 1/(1 - the required reserve ratio). C. 1/(required reserve ratio). D. 1/(1 - MPC).