In the monetary small open-economy model with a flexible exchange rate, an increase in the domestic money supply increases
A) domestic output, but has no effect on the domestic price level or the nominal exchange rate.
B) the domestic price level, but has no effect on domestic output or the nominal exchange rate.
C) the nominal exchange rate, but has no effect on domestic output or the domestic price level.
D) the domestic price level and the nominal exchange rate, but has no effect on domestic output.
D
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Catering to special interest lobbying may distort the government's provision of public goods away from the social optimum
Indicate whether the statement is true or false
The law of diminishing marginal utility explains why
A. most individual demand curves are straight lines. B. the consumer’s optimal purchase is at the tangency of an indifference curve and the budget line. C. most individual demand curves slope downward. D. marginal utility falls when total utility falls.