The reason that it is possible for the economy in the above figure to be at E2 rather than at E1 is that
A) in the long run there is always less than full employment.
B) in the short run the economy can produce more than it can in a long-run full-adjustment situation.
C) AD always shifts outward and never shifts inward.
D) the economy must be in a recession.
B
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The current debate about fiscal and monetary policy tends to focus on
a. which policy is less destabilizing. b. which policy is more effective. c. whether the Fed can control the money supply. d. which policy works more quickly.
If a consumer receives 20 units of utility from consuming two candy bars, and 25 units of utility from consuming three candy bars, the marginal utility of the third candy bar is
A) 25 utils. B) 20 utils. C) 5 utils. D) unknown as more information is needed to determine the answer.