If the ________ effect is greater than the ________ effect, a decrease in interest rates will decrease saving and increase consumption spending by households.
A. income; substitution
B. consumption; wealth
C. wealth; consumption
D. substitution; income
Answer: D
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Both monopolistically competitive firms and perfectly competitive firms maximize profits
A) by producing where price equals average total cost. B) by producing where price equals average variable cost. C) by producing where marginal revenue equals marginal cost. D) by producing where marginal revenue equals average revenue.
A person quits her job in order to spend time looking for a better paying job. This is an example of
A) frictional unemployment. B) cyclical unemployment. C) seasonal unemployment. D) structural unemployment.
Critics argue that firms use advertising to develop consumer preferences
a. True b. False Indicate whether the statement is true or false
Social Security payments received by your grandmother
A. are excluded from GDP, but are included in personal income. B. are included in GDP, but are excluded from personal income. C. are excluded in both GDP and personal income. D. are included in both GDP and personal income.