Clifford lives by the motto "Eat drink and be merry today, for tomorrow doesn't matter"
If today's consumption is represented by "x" and tomorrow's consumption is represented by "y", then which of the following best represents Clifford's utility function? A) U = x - y
B) U = x/y
C) U = x
D) U = y
C
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According to rational expectations, if policy makers consistently stimulate aggregate demand when real output falls below the economy's potential output, then people will not be able to anticipate the effects of this policy on the price level, unemployment, and the real output level
Indicate whether the statement is true or false
In a short-run macroeconomics equilibrium, real GDP exceeds potential GDP, so the...
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Jose goes to an all-you-can-eat buffet at a Chinese restaurant and consumes three plates of food. He does not go back for a fourth plate of food because
A. The marginal utility of the fourth plate would no longer be positive. B. The price of the fourth plate is too high. C. He has reached the point of increasing marginal utility. D. His total utility would increase with the fourth plate of food.
In the long run, what effect does a government's deficit spending have on equilibrium real Gross Domestic Product (GDP)?
A. Higher government deficits will not raise equilibrium Gross Domestic Product (GDP) above the full-employment level. B. Deficit spending will decrease the nation's equilibrium real Gross Domestic Product (GDP). C. Equilibrium real Gross Domestic Product (GDP) will increase beyond the full-employment level and there will also be an inflationary effect. D. The government's deficit spending will increase equilibrium real Gross Domestic Product (GDP).