In the above figure, which of the following statements is TRUE? I. The consumer maximizes utility by consuming at point A. II. The marginal rate of substitution at point B and point A are equal because they are on the same budget line
A) only I
B) only II
C) both I and II
D) neither I nor II
A
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Refer to Figure 10.8. Other things equal, a decrease in the nominal interest rate on money would best be represented by
A) a movement from point A to point C. B) a movement from point A to point D. C) a shift from LM1 to LM2. D) a shift from LM2 to LM1.
Economies of scale commonly arise because of coordination problems
a. True b. False Indicate whether the statement is true or false
The simultaneous occurrence of high inflation and high unemployment is called
A. Reflation. B. Stagflation. C. Depression. D. Deflation.
Contractionary monetary policy by the Fed could include
A) lowering the discount rate. B) decreasing government transfer payments. C) decreasing reserve requirements. D) selling government securities in the open market.