Which of the following is the behavior of a rational consumer?
a. to seek to maximize his or her own total utility
b. to purchase a good until marginal utility falls to zero
c. to match his or her personal utility to that of all other consumers
d. to maximize the variety of goods he or she purchases
a. to seek to maximize his or her own total utility
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Other things being constant, if the marginal propensity to save (MPS) is 0.1, and private investment spending falls by $100 million, then real Gross Domestic Product (GDP)
A) increases by $1 billion. B) increases by $90 million. C) decreases by $1 billion. D) decreases by $10 million.
If the Fed is concerned about a possible recession, it ________ the federal funds rate, which ________ the quantity of reserves and ________ the amount of bank loans
A) raises; increases; increases B) lowers; increases; increases C) raises; decreases; decreases D) lowers; increases; decreases E) lowers; decreases; decreases