If people care about relative consumption rather than absolute consumption, then:
A. there is little need for government intervention in markets.
B. their choices will lead to an efficient allocation of resources.
C. their behavior will be consistent with traditional economic models.
D. individuals' decisions need not lead to socially optimal outcomes.
Answer: D
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In the classical model, if money growth and velocity are constant, then:
a. the price level will rise at the rate of output growth. b. the price level will be constant. c. the price level will fall at the rate of output growth. d. none of the above.
The chair of the Board of Governors of the Fed serves: a. a two-year term that coincides with that of members of Congress. b. a four-year term
c. a seven-year term. d. a fourteen-year term. e. a six-year term.
Which of the following statements draws a false conclusion?
a. Life expectancy in an average African country is lower than in an average European country; therefore Europeans can expect to outlive Africans. b. Nations that currently produce no capital goods, and whose inhabitants are hungry, risk famine with internally funded capital investments. c. Some African nations have substantially more food and capital investment than others; therefore, their standard of living is higher. d. Population reduction policies, if effective, can improve the nation's wealth by increasing real per capita GDP. e. The vicious circle of poverty argument states that poverty precludes capital investment and that no capital investment perpetuates poverty.
If the demand for a product increases, we would expect that price will initially ________, and eventually ________.
A. rise; fall B. rise; continue to rise C. fall; rise D. fall; continue to fall