Grace consumes two goods: iced tea and spaghetti. The price of iced tea is $2 per bottle. Her income is $500 per month. Grace spends all her income each month. She purchases 50 bottles of iced tea and 100 servings of spaghetti. What is the price of a serving of spaghetti?
a. $10
b. $5
c. $4
d. $2
c
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Which of the following does not describe a characteristic of short-term economic fluctuations?
A. The unemployment rate rises during recessions. B. Expansions and recessions are felt throughout the economy. C. Durable-goods industries are less sensitive to short-term fluctuations than service and non-durable industries. D. Expansions and recessions are irregular in length and severity.
A country runs a deficit in its current account if:?
What will be an ideal response?
How does the federal government finance a budget deficit?
A. It borrows funds by selling Treasury bonds. B. It purchases U.S. Treasury bonds. C. It cuts spending on entitlement programs. D. It prints more money.
According to Keynesians, the primary reason money is not neutral is
A. price stickiness. B. reverse causation. C. rational expectations. D. misperceptions over the aggregate price level.