If Nick consumes only two goods, oranges and plums, and he increases his consumption of oranges, then
a. the price of oranges must have increased
b. Nick's income must have increased
c. plums and oranges must be complements
d. he must reduce his consumption of plums to remain on the same indifference curve
e. Nick's MU/P of oranges will now increase
D
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To eliminate an inflationary gap using fiscal policy, the government could
A) increase government expenditure on goods and services and simultaneously increase taxes by an equal amount. B) only decrease taxes. C) increase government expenditure on goods and services and simultaneously decrease taxes by an equal amount. D) decrease the quantity of money. E) increase taxes.
An increase in the capital stock would shift the production function _______ and the long-run aggregate supply curve to the _______.
A. upward; right B. upward; left C. downward; left D. to the right; right