The equation MRS = 1 + r means that ________
A) consumers prefer to avoid fluctuations in consumption
B) at the margin, consumption grows at the real interest rate
C) any movement along the budget constraint would cause a decrease in the consumer's utility
D) consumer utility is a positive function of the real interest rate
C
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What does "there is no such thing as a free lunch" mean in economics?
A. Sometimes people may take friends out to lunch and pay for them. B. All items in the lunch menu have specific prices. C. Products only have value because people are willing to pay for them. D. Scarce resources are used up to provide "freebies" and giveaways.
India and China represent a great opportunity for U.S. companies because they have
Some economists argue that the short-run Phillips curve is not vertical, and that monetary policy can be effective in the short run. Which one of the following is not one of the reasons for this skepticism?
A) Wages and prices may not adjust rapidly enough to keep the short-run Phillips curve vertical. B) Individuals may not be able to use information of Fed Policy to make a reliable forecast of inflation. C) Empirical evidence shows workers and firms have rational expectations. D) Contracts with workers and suppliers may hinder firms' abilities to adjust to price changes.
The benchmark default-free interest rate of the financial system is generally considered to be:
A) the federal funds rate B) the interest rate on the 10-year Treasury note C) the discount rate D) the 30-year fixed rate mortgage