Resolving Adam Smith's diamond-water puzzle involves
a. realizing that price is not directly related to total utility.
b. knowing that at optimal purchase, price will tend to equal marginal utility.
c. knowing that, as increasing quantities of a good are consumed, marginal utility diminishes and, conversely, consuming a small quantity of a good produces high marginal utility.
d. All of the above are correct.
d
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What are options for monetary easing using interest rate policy instruments when the rate has hit the zero lower bound?
a. At that point, interest rate policy cannot be used. b. Monetary easing can still occur whenever interest rates are greater than zero at the retail level. c. The central bank can increase the money supply, and interest rates can be less than zero. d. Borrowing can be stimulated in ways other than lower rates of interest.
The term "variable input" is used to refer to inputs that vary in terms of quality and, therefore, productivity
Indicate whether the statement is true or false