Refer to the data. What level of total utility will the utility-maximizing consumer realize?
Answer the question on the basis of the following marginal utility data for products X and Y. Assume that the prices of X and Y are $4 and $2 respectively and that the consumer's income is $18.
A. 96 utils.
B. 108 utils.
C. 72 utils.
D. 142 utils.
A. 96 utils.
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Which of the following best describes most economists' approach to economic stabilization until the 1930s?
A. Use a sound finance approach during normal economic times, and a functional finance approach during a recession or a boom. B. Run larger deficits during recessions and smaller deficits during economic booms, counting on economic growth to be high enough to keep the debt-to-GDP ratio low. C. Maintain a balanced budget at all times, under the principle of sound finance. D. Economists were wholly concerned with microeconomics and had ignored problems of government deficits, debt, recessions, and economic growth.
Excess burden is the total burden of a tax minus the tax revenue generated by the tax.
Answer the following statement true (T) or false (F)
The movement away from bank lending towards asset-backed securities has:
A. increased the importance of the bank-lending channel of monetary policy. B. led the FOMC to abandon interest-rate targets. C. decreased the importance of the bank-lending channel. D. eliminated the bank-lending channel as a mechanism for monetary policy.
If the Fed decreases the money supply at the same time the federal government decreases government spending, the crowding-out effect
A) will not be affected. B) will be increased. C) will be reduced. D) could either increase or decrease depending on the sensitivity of planned investment to the interest rate.