How do spending levels impact the economy in an inflationary period?
A. Overall spending generally remains unchanged.
B. Consumers and businesses spend less.
C. Consumers spend less, but businesses tend to spend more.
D. Consumers keep spending no matter what; businesses are more cautious
B. Consumers and businesses spend less.
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Assume that Oscar is maximizing his total utility and that the equal marginal principle holds by the time he is done allocating his budget.If MUa/Pa = 100/$35, MUb/Pb = 300/?, and MUc/Pc = 400/?, the prices of products B and C
A. cannot be determined from the information given. B. must be $105 and $175, respectively. C. must be $100 and $200, respectively. D. must be $105 and $140, respectively.
To determine whether a market is perfectly competitive, economists examine the
A. number of firms in the market. B. similarities among the products of the different firms in the market. C. ease of entry and exit by firms in the market. D. All of the responses are correct.
If velocity is constant in the long run, which of the following results flow from the quantity theory of money?
A) A change in the money supply changes real GDP by an equal percentage. B) A change in the money supply changes nominal GDP by an equal percentage. C) A change in the money supply changes real interest rates by an equal percentage. D) A change in the money supply changes consumer lending by an equal percentage.
As a firm increases the level of output that it produces, short-run average fixed cost
A. rises and then falls. B. decreases. C. decreases up to a particular level of output and then increases. D. remains constant since fixed costs are constant.