Assume the central bank decides to pursue contractionary monetary policy. Where and how should you begin your analysis when analyzing the chain reaction of economic interactions?
a. Start the analysis in the real credit market with supply of real credit shifting to the right.
b. Start the analysis in the real credit market with aggregate demand for real credit shifting to the left.
c. Start the analysis in the real credit market with demand for real credit shifting to the left.
d. Start the analysis in the real credit market with demand for real credit shifting to the right.
e. Start the analysis in the real credit market with supply of real credit shifting to the left.
.E
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The marginal social cost is
A) equal to the marginal private cost plus the marginal external cost. B) equal to the marginal private cost minus the marginal external cost. C) the same as the marginal private cost. D) the same as the marginal external cost.
Which of the following is NOT an assumption of marginal utility theory?
A) People derive utility from their consumption. B) More consumption yields more total utility. C) Marginal utility diminishes with more consumption. D) Utility can be measured and the units of utility are precisely defined.
The payments to owners of capital include
a. interest and profits. b. debt and taxes. c. wages and salaries. d. expenses and bonuses. e. All of the above are correct.
The fact that invention is based largely on fixed costs and is a public good means that which of the following is not relevant to the process?
a. average total cost b. marginal cost c. external cost d. average variable cost