If the marginal utility of each good a consumer buys does not diminish but remains constant, we should see consumers
a. buying no goods at all
b. spending all of their income on the good with the highest marginal utility
c. buying one unit of each good
d. buying only the least expensive good
e. leaving the store in total confusion
B
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When a company whose ability to repay its obligations in full is uncertain,
A) it will have to issue debt with longer maturities than would a company with a lower probability of default. B) its bonds will sell for higher prices than would the bonds of a company with a lower probability of default. C) it must offer investors higher yields to compensate them for the risk they take in buying their bonds or making loans. D) it must do so through financial markets rather than through financial intermediaries.
If the multiplier is 6, then the MPC is
a. 0.16. b. 0.83. c. 0.71. d. 0.86.
Money is an imperfect store of value when
A. the rate of inflation is high. B. the unemployment rate is high. C. gold prices are falling. D. businesses are failing due to bankruptcy.
A medium of exchange is
A. the only job of money. B. the least important job of money. C. the most important job of money.