Before an uneven rise in prices Allan consumed five bread and six juice. After the price increase and with an increased welfare payment from the government Allan consumes four bread and seven juice
Does the government payment represent a true cost-of-living adjustment? A) Yes, if the two consumption bundles lie on the same indifference curve.
B) Yes, if the second bundle yields more utility than the first.
C) No, the first bundle is clearly preferred.
D) Not enough information.
A
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Identify the correct definition of the federal funds rate
A) The federal funds rate is the interest rate at which the Fed lends money to households. B) The federal funds rate is the interest rate at which banks lend money to the Fed. C) The federal funds rate is the interest rate at which banks lend their deposits with the Fed to other banks. D) The federal funds rate is the interest rate at which the Fed lends money to business firms.
The above figure shows the market for pizza. The market is in equilibrium when new pizza firms enter the market. What point represents the most likely new price and quantity?
A) A B) B C) C D) D E) E
The adverse selection problem is most likely in which of the following occupations?
a. waiter/waitress b. barber c. college professor d. supermarket cashier e. tightrope walker
The crude quantity theory of money and the sophisticated quantity theory of money are approximately similar
A. in times of deflation. B. in times of high unemployment. C. in times of full employment. D. in no set of circumstances.