The intuition behind the slope of the LM curve is that
a. as the interest rate increases, the money supply increases and income increases.
b. as the interest rate increases, investment and income decreases.
c. as income increases, money demand increases which increases interest rates.
d. as income increases, money demand decreases which decreases interest rates.
e. none of the above.
C
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The unemployment rates in the U.S. from 2002 to 2012 were in the range of:
A. 4.6% to 9.6% B. 1.5% to 4.5% C. 8.4% to 12.4% D. 10.7% to 14.7%
A Big Mac meal costs $3.00 and gives you an additional 5 units of utility; a meal at the Four Seasons Hotel costs $27.00 and gives you an additional 45 units of utility. Based only on the information you have, using the theory of rational choice, you most likely would:
A. be indifferent between eating the Big Mac and eating at the Four Seasons Hotel. B. choose to eat at the Four Seasons Hotel. C. choose to eat the Big Mac meal. D. decide that eating at the Four Seasons Hotel is preferable because though the marginal utilities of both meals are the same, the total utility is greater in the case of the meal at the Four Seasons Hotel.