The theory of consumer behavior assumes that:
A. consumers behave rationally, attempting to maximize their satisfaction.
B. consumers have unlimited money incomes.
C. consumers do not know how much marginal utility they obtain from successive units of
various products.
D. marginal utility is constant.
Answer: A
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The implementation lag is
A) the time it takes for policy makers to obtain data indicating what is happening in the economy. B) the time it takes for policy makers to be sure of what the data are signaling about the future course of the economy. C) the time it takes to pass legislation to implement a particular policy. D) the time it takes for policy makers to change policy instruments once they have decided on the new policy. E) the time it takes for the policy actually to have an impact on the economy.
An increase in the interest rate shifts the money demand curve to the right
a. True b. False