At a competitive equilibrium, if there are no taxes, subsidies, price regulations, quantity regulations, or externalities,
A) the marginal benefit is greater than the marginal cost.
B) resource use is efficient.
C) the marginal benefit is less than the marginal cost.
D) both the marginal benefit and the marginal cost of the last unit produced equal zero.
E) the marginal benefit is greater than the marginal cost by as much as possible.
B
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The aggregate demand curve shows the relationship between inflation and:
A. short-run equilibrium output. B. the real interest rate. C. the exchange rate. D. the nominal interest rate.
Suppose that there is a positive aggregate demand shock and the central bank commits to an inflation rate target. If the commitment is credible, then
A) the public's expected inflation will remain unchanged. B) the short-run aggregate supply curve will not shift. C) over time inflation will fall back down to the inflation target. D) all of the above. E) both A and B.
Refer to Table 4.2. With which scenario will you be best off by investing in Japanese bonds instead of U.S. bonds?
A) A B) B C) C D) D
With the invention of ATM machines, the public now holds less currency. As a result, we would expect to have seen
a. both the M1 and the M2 multipliers to increase over time. b. the M1 multiplier to increase while the M2 multiplier to decrease over time. c. the M1 multiplier to decrease while the M2 multiplier to increase over time. d. None of the above