Suppose that Dianne Lindsay spends all her income on two goods, A and B, in a manner in which the marginal utility to price ratios are not equal, MUa/Pa is greater than MUb/Pb. If at that time the price of A is higher than the price of B, then she
a. is already maximizing her total utility and should make no change
b. should increase her purchases of B and decrease her purchases of A because the price of A is higher
c. should increase her purchases of B and decrease her purchases of A because the marginal utility of A is higher
d. should lower the price of good A relative to good B
e. should increase her purchases of A and decrease her purchases of B
E
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Which of the following statements is true?
a. National income is total income earned by households whereas personal income is total income received by households (including transfer payments). b. Disposable personal income equals personal income minus personal taxes. c. The expenditures approach and the income approach yield the same GDP figure. d. All of these.
If the Fed buys $10 million dollars in government securities, and the required reserve ratio is 20 percent, the banking system is able to expand the money supply by:
A. $10 million. B. $50 million. C. $2 million. D. $40 million.
Approximately how much of aggregate national income in the United States is spent on health care today?
A. 18 percent B. 45 percent C. 3 percent D. 34 percent
If the rate of inflation in the U.S. falls relative to the rate of inflation in foreign nations, U.S. exports _______ and imports _______.
A. increase; decrease B. decrease; increase C. decrease; decrease D. increase; increase