In an indifference curve/budget line diagram, at your consumer equilibrium, that is, your best affordable point, which of the following statements is CORRECT?
A) Any movement upward or downward on your budget line will move you to a less preferred point.
B) Any movement upward or downward on your indifference curve will move you to a less preferred point.
C) Your marginal rate of substitution is greater than the magnitude of the budget line by as much as possible.
D) All of the above are correct.
A
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If production remains the same and all prices double, then real GDP:
A. and nominal GDP are both constant. B. is constant and nominal GDP is reduced by half. C. is constant and nominal GDP doubles. D. doubles and nominal GDP is constant.
The investment function tells us, at any given interest rate
A) how many funds people will invest in the stock market. B) how many funds people will earn on their stock market investments. C) how profitable it will be for firms to expand. D) how much businesses will spend on adding to the capital stock.