The marginal rate of substitution between two goods is given by:
A. the inverse of the slope of an indifference curve.
B. the slope of a line tangent to an indifference curve.
C. negative one times the inverse of the slope of an indifference curve.
D. negative one times the slope of a line tangent to an indifference curve.
D. negative one times the slope of a line tangent to an indifference curve.
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American households spend about ____ of the average family budget on services, with the rest spent on goods.
A. one-half B. two-thirds C. one-quarter D. one-tenth
Markets are generally more effective at providing ________ and governments are most effective at providing ________
A) pure public goods; common pool resources B) pure private goods; pure public goods C) common pool resources; club goods D) club goods; pure private goods
Everything else held constant, an increase in the currency ratio will mean ________ in the M2 money multiplier and ________ in the M2 money supply
A) an increase; an increase B) an increase; a decrease C) a decrease; an increase D) a decrease; a decrease
The figure above shows the market for bank reserves in Futureland. If the Bank of Futureland undertakes an open market purchase of government securities that changes the quantity of reserves by $25 billion, then the federal funds rate will
A) fall to 4 percent a year.
B) remain at 6 percent a year.
C) rise to 8 percent a year.
D) change, but more information is needed to determine by how much.
E) None of the above answers is correct.