Assume a diagram in which a budget line is imposed on an indifference map. A consumer will maximize her utility:
A. at any point where the budget line and an indifference curve intersect.
B. at either point where the budget line intersects the horizontal and vertical axes.
C. where the budget line is tangent to an indifference curve.
D. where the ratio of the two product prices equals the reciprocal of the consumer's income.
Answer: C
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Borrowers benefit and lenders lose when the
A) actual interest rate is less than the expected real interest rate. B) actual interest rate is greater than the expected real interest rate. C) actual interest rate is equal to the expected real interest rate. D) actual inflation rate is less than the expected inflation rate.
During which decade were John Maynard Keynes' ideas challenged?
a. 1930s b. 1940s c. 1960s d. 1970s e. 1980s