Purposeful behavior suggests that:
A. everyone will make identical choices.
B. resource availability exceeds economic wants.
C. individuals may make different choices because of different desired outcomes.
D. an individual's economic goals cannot involve trade-offs.
Answer: C
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A linear demand curve:
A. has a constant elasticity. B. will be more elastic when price is low and more inelastic when price is high. C. must be either perfectly inelastic or perfectly elastic. D. has a constant slope.
Keynes blamed economic downturns primarily on
a. the instability of consumption. b. declines in the interest rate. c. poor government management. d. the instability of planned investment.
Under what circumstances does inflation cause no harm to either lenders or borrowers?
a. When inflation equals 0. b. When inflation equals the historic mean. c. When inflation equals the inflation of the year before. d. When there is deflation. e. When the actual inflation rate equals the expected inflation rate.
A reflationary (expansionist) policy:
a) Increases aggregate supply b) Increases aggregate demand c) Decreases the price level d) Increases full employment