According to liquidity preference theory, if the price level
a. fell, the interest rate would rise, and induce investment spending to rise.
b. fell, the interest rate would fall, and induce investment spending to fall.
c. rose, the interest rate would rise, and induce investment spending to fall.
d. rose, the interest rate would fall, and induce investment spending to rise.
c
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The marginal utility from the first burrito Bobby consumes is larger than the marginal utility from the first taco Bobby consumes. As a result
A) tacos are an inferior good for Bobby. B) Bobby will never consume tacos. C) Bobby will consume a taco only if the price of a taco is less than the price of a burrito. D) burritos and tacos are substitute goods for Bobby.
When the government charges an output tax to eliminate an externality, it forces the manufacturer to ________ the negative externality
A) charge customers for B) internalize C) stop producing D) increase the production of