The law of ________ refers to a consumer's decrease in additional satisfaction as she consumes more and more units of a good.
A. infinite demand
B. utility maximization
C. diminishing marginal utility
D. consumer choice
Answer: C
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Equilibrium real income is more stable in the face of aggregate autonomous expenditure variability under
A) a floating exchange rate. B) a pegged exchange rate. C) a fixed exchange rate. D) perfect capital mobility systems.
Would the maximin criterion achieve perfect income equality?
a. Yes. There would be no way to reallocate resources to raise the utility of the poor. b. Yes. The maximin criterion would eliminate poverty. c. No. It is impossible for complete equality to benefit the worst-off people in society. d. No. Complete equality would reduce incentives to work, which would reduce total income, which would reduce the incomes of the worst-off people in society.
If real GDP rises and the GDP price index has increased:
A. the percentage increase in nominal GDP must have been less than the percentage increase in the price level. B. nominal GDP may have either increased or decreased. C. nominal GDP must have increased. D. nominal GDP must have fallen.
Refer to the data. From this information we can conclude that the net foreign factor income is:
Answer the question on the basis of the following data. All figures are in billions of dollars.
A. negative $5 billion.
B. zero.
C. positive $5 billion.
D. positive $15 billion.