Total utility decreases when diminishing marginal utility is present.
Answer the following statement true (T) or false (F)
False
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
Each of the curves plotted in the graph shown in the above figure is known as a
A) Laffer curve. B) Phillips curve. C) Keynesian curve. D) Lorenz curve.
Consider the production possibilities curve [PPC] for a country producing only cheese and wine. The first few resources transferred from cheese to wine production are:
a. those that are most specialized in cheese production. b. those that are most specialized in wine production. c. those that are least specialized in cheese production. d. those that are neither specialized in cheese nor wine production. e. those that are highly specialized in both cheese and wine production.
If the required reserve ratio is 0.05 and the Fed sells a $2,000 bond directly to an individual who pays for it with a check, what will happen to the money supply?
a. The money supply will increase by $2,000. b. The money supply will decrease by $2,000. c. The money supply will increase by $100. d. The money supply will decrease by $100. e. The money supply will decrease by $200.