In the late 1990s, aggregate demand was growing rapidly, but productivity grew even more rapidly. What happened to prices and output?
A. output went up a lot, prices went up some
B. prices went up a lot, output went up some
C. output went down, prices went up some
D. both prices and output went down
E. both prices and output remain unchanged
Ans: A. output went up a lot, prices went up some
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The theories of economics, with surprisingly few exceptions, are extensions of which of the following assumptions about people?
A) People will do whatever earns them the most money. B) People will do whatever helps them to be "one up" on others. C) People will do whatever makes them popular. D) People will do whatever most effectively promotes the common good. E) People will do whatever yields them the largest net benefit.
If income increases due to a decrease in taxes, then
A) utility will increase because consumers can afford a larger bundle of goods. B) utility will fall because consumers will be forced to buy a smaller bundle of goods. C) utility will remain constant. D) utility will increase because consumers will be forced to buy a smaller bundle of goods.