In order to have a meaningful measure of marginal utility, we must define the time period during which consumption is occurring
a. True
b. False
Indicate whether the statement is true or false
True
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A technical innovation in the production of automobiles by Ford Motor Company's for 1 million cars per year would necessarily
a. shift the "1 million car" isoquant away from the origin. b. shift the "1 million car" isoquant toward the origin. c. cause 1 million cars to be produced with more capital and less labor. d. cause 1 million cars to be produced with more labor and less capital.
A decrease in the price of a currency in terms of another under a flexible exchange rate regime is called:
a. capital flight. b. depreciation. c. revaluation. d. devaluation. e. currency adjustment.
The government can close an inflationary gap by reducing government spending
Indicate whether the statement is true or false
Consider the budget constraint between "spending today" on the horizontal axis and "spending a year from today" on the vertical axis. Suppose that you have $100 today and expect to receive $100 one year from today. Your money market account pays an annual interest rate of 25%, and you may borrow money at that interest rate. Suppose now that the interest rate decreases to 10%. What happens to the
slope of your budget constraint relative to when the interest rate was 25%? The slope a. becomes steeper. b. becomes flatter. c. doesn't change because the budget constraint shifts in parallel to the original budget constraint. d. doesn't change because the budget constraint shifts out parallel to the original budget constraint.