Which of the Following Statements Is (Are) True

question 243

Multiple Choice

Which of the following statements is (are) true?

• A) Consumers are constrained by a budget.
• B) If a consumer decides to spend more on one good, he or she must decide to spend less on another good to satisfy the budget constraint.
• C) The marginal decision rule states that an activity should be expanded if its marginal benefit exceeds its marginal cost.
• D) All of the above statements are true.

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Definitions:

Adaptive Expectations

A theory in economics that expectations of future events are constructed based on past events and that agents adjust slower to new information.

Monetarists

Economists who emphasize the role of governments in controlling the amount of money in circulation as a primary method for managing the economy and combating inflation.

Money Supply

The comprehensive sum of money resources in an economy, encompassing cash, coins, and deposits in checking and savings accounts, at a specific moment.

Real Output

A measurement of the economic production adjusted for price changes, often used to evaluate the size and health of an economy.