If a consumer is spending all of his/her income in a manner where MUa / Pa = MUb / Pb, then the consumer:
a. should increase the consumption of A and decrease the consumption of B.
b. is maximizing his/her utility.
c. should increase the consumption of B and decrease the consumption of A.
d. should increase the consumption of both A and B.
e. should decrease the purchases of both A and B.
b
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Describe the channels through which an open market purchase of bonds by the Fed affects output in a closed economy
What will be an ideal response?
If supply increases and demand decreases
A) the market clearing price definitely rises, and the equilibrium quantity definitely falls. B) the market clearing price definitely rises, and the effect on the equilibrium quantity is indeterminate. C) the market clearing price definitely falls, and the effect on the equilibrium quantity is indeterminate. D) the effect on the market clearing price is indeterminate, and the equilibrium quantity definitely falls.