A higher price for a good implies that
A) the marginal utility of the good has declined.
B) the total value of the good to the consumer has increased.
C) the sacrifice of utility of another good has increased.
D) the marginal utility of another good has decreased.
Answer: C
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When the Fed engages in open market operations, it is buying or selling
A) loans made to banks to meet the legal reserve requirement ratio. B) gold. C) U.S. government securities newly issued by the U.S. Treasury. D) capital equipment. E) U.S. government securities.
The derived demand curve for loans slopes downward because as interest rates
a. fall, future income becomes less valuable. b. fall, investors develop pessimistic expectations. c. fall, future income becomes more valuable. d. rise, investors become pessimistic.
An element of trust is built into money because
A. people must trust that the government can always print more of it if necessary. B. people must trust that it will still have value when they want to spend it in the future. C. the government maintains a monopoly over the money supply, and people tend to trust monopolies. D. people must trust the Federal Reserve to prevent banks from failing.
“To be sure, any theoretical model must be abstracted ‘from the richness and complexity of behavior.’ However, abstraction becomes falsification when it so simplifies human behavior as to leave it unrecognizable and unexplained.” Explain
Please provide the best answer for the statement.