A demand curve is downward sloping because
A. as the price of the good decreases, the consumer finds that a lower indifference curve is attainable.
B. as the price of the good decreases, the consumer finds that a higher indifference curve is attainable.
C. consumers move downward along a budget line as the price of a good decreases.
D. consumers move upward along a budget line as the price of a good decreases.
Answer: B
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Explain the "too big to fail" doctrine
The production possibilities curve shows:
A. the minimum amount of one good that can be produced for every possible production level of the other good. B. the maximum amount of one good that can be produced for every possible production level of the other good. C. how increasing the resources used to produce one good increases the production of the other good. D. how increasing the production of one good allows production of the other good to also rise.
A and B are substitute goods, but A and C are complementary goods. If the costs of producing A decreases, then the demand for:
A. Both B and C will decrease B. Both B and C will increase C. B will increase and the demand for C will decrease D. B will decrease and the demand for C will increase
The required reserve ratio is 12.5%. The money multiplier is
A. 2.5. B. 6. C. 7.5. D. 8.