The law of diminishing marginal utility states that marginal utility must diminish after the first unit of consumption of every good or service
a. True
b. False
Indicate whether the statement is true or false
False
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Because money growth is a major component determining the inflation rate, in order to forecast inflation we should forecast actions by the
A) Congress. B) President. C) Fed. D) Office of the Treasury. E) U.S. Mint.
If the economy is in long run equilibrium and then aggregate demand increases, in the long run the increase in aggregate demand means that the
A) price level will be higher but real GDP will be unaffected. B) real GDP will be larger but the price level will be unaffected. C) the price level will be higher and real GDP will be larger. D) neither the price level nor real GDP will be unaffected.
Answer the following statement(s) true (T) or false (F)
1. Once entry and exit have driven economic profits to zero, the demand curve and average total cost curve will be tangent to each other. 2. In monopolistic competition, increasing output to lower average total cost is unprofitable. 3. In monopolistic competition, the tendency is for an industry to have too few firms. 4. With monopolistic competition, society is willing to pay more for the product than it costs society to produce it. 5. With monopolistic competition, firms fail to meet allocative efficiency because marginal cost is more than price.
A monetary policy target is a variable that
A) the Fed can affect directly. B) equals one of the Fed's main policy goals. C) the Fed has no ability to change. D) the Fed cannot affect directly.