If government uses its stabilization policies to maintain full employment under conditions of cost-push inflation:
A. a deflationary spiral is likely to occur.
B. an inflationary spiral is likely to occur.
C. stagflation is likely to occur.
D. the Phillips Curve is likely to shift inward.
B. an inflationary spiral is likely to occur.
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A utility-maximizing consumer would never purchase a good if the:
a. MU/P is positive. b. marginal utility is positive. c. marginal utility is negative. d. none of these is correct.
If people took external costs like pollution into consideration, they would on net:
A. not change their behavior to consume more or less of the goods causing externalities. B. consume less of the goods causing these externalities. C. consume a socially non-optimal amount of the goods causing the externalities. D. consume more of the goods causing these externalities.
When prices fall and the cash balances that you hold in your wallet are worth more allowing you to purchase more with your money, then this explains why the aggregate demand curve is downward sloping. The effect that describes this phenomena is the:
A. Real balances effect B. Foreign trade effect C. Interest rate effect D. Nominal income effect
To maximize progress toward a political goal, the "rational terrorist" will always choose those actions for which the
A. most money is lost. B. most people die. C. fewest innocent people die. D. marginal benefit equals or exceeds the marginal cost.