During an economic downturn, Keynes argued that businesses would:
A. not increase spending because of the sharp rise in interest rates.
B. not increase spending even if interest rates fell all the way to zero.
C. increase spending because interest rates would fall to zero.
D. increase spending because of the sharp rise in interest rates.
Answer: B
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Refer to Figure 7-4. If consumers paid the full price of medical services, the price they would pay is
A) $25. B) $40. C) $55. D) >$55.
The law of diminishing marginal utility helps explain: a. why most individual demand curves are straight lines. b. why most supply curves slope upward
c. why most individual demand curves slope downward. d. why marginal utility falls when total utility falls.
In the long run, a decrease in the money supply growth rate
a. reduces expected inflation so the long-run Phillips curve shifts left. b. reduces expected inflation so the short-run Phillips curve shifts left. c. Both A and B are correct. d. None of the above is correct.
Figure 4-25
Refer to . The tax causes a reduction in consumer surplus that is represented by area
a.
A.
b.
B + C.
c.
D + E.
d.
F.