The law of diminishing marginal utility is in effect when marginal utility is
A. initially zero and then increasing.
B. initially zero and then decreasing.
C. positive and increasing.
D. positive and decreasing.
Answer: D
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The efficiency case made for free trade is that as trade distortions such as tariffs are dismantled and removed
A) government tariff revenue will decrease, and therefore national economic welfare will decrease. B) government tariff revenue will decrease, and therefore national economic welfare will increase. C) deadweight losses for producers and consumers will decrease, hence increasing national economic welfare. D) deadweight losses for producers and consumers will decrease, hence decreasing national economic welfare. E) government tariff revenue will increase, hence increasing national economic welfare.
If the ________ curve is relatively more unstable than the ________ curve, an interest rate target is preferred
A) IS; IS B) IS; LM C) LM; IS D) LM; LM
Older Americans living on a pension and therefore on a fixed income, tend to be made
a. better off when prices rise. b. better off when inflation rates rise. c. worse off when prices rise. d. worse off when prices fall.
If there is an expansionary gap in the short run, the adjustment to the long-run equilibrium involves expansion of aggregate demand
Indicate whether the statement is true or false