A mathematical technique used to solve constrained optimization problems (finding the consumer optimum, for example) is:
A) the method of Lagrange multipliers.
B) the Cobb-Douglas method.
C) the Slutsky method.
D) the Hicks substitution method.
A
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During a presidential campaign, the incumbent argues that he should be reelected because nominal GDP grew by 12 percent during his 4-year term in office. You know that population grew by 4 percent over the period and that the GDP deflator increased by 6 percent during the past 4 years. You should conclude that real GDP per person
a. grew by more than 12 percent. b. grew, but by less than 12 percent. c. was unchanged. d. decreased.
Refer to the given table. An increase in the money supply of $20 billion will cause the equilibrium interest rate to:
Answer the question on the basis of the following table:
A. fall by 4 percentage points.
B. fall by 2 percentage points.
C. rise by 4 percentage points.
D. rise by 2 percentage points.