A consumer will buy a new product rather than an existing product:
A. when the MU/P of the new product is less than the MU/P of the existing product.
B. when the substitution of the new product for the old product increases the consumer's total
utility.
C. only if the new product has a lower price than the existing product.
D. only if the MU of the new product exceeds the MU of the existing product.
Answer: B
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The aggregate production function describes the relationship between
A) real GDP and the quantity of labor employed. B) real GDP and the price level. C) the rate of growth of real GDP and inflation. D) real GDP and the unemployment rate.
Which of the following is a current account transaction?
a. the purchase of a foreign engineering firm by a domestic investor b. the import of shoes by a domestic retailer c. a loan by a domestic bank to a foreigner d. a loan by a foreign bank to a domestic manufacturer