The Law of Diminishing Marginal Utility Indicates That the Marginal

question 129

Multiple Choice

The law of diminishing marginal utility indicates that the marginal utility curve eventually becomes:

• A) vertical.
• B) U-shaped.
• C) upward sloping.
• D) downward sloping.

---

Definitions:

Quantity Theory

An economic theory that suggests that the amount of money in circulation directly impacts the level of economic activity and the price levels.

Increase Money

Increase in money typically refers to a rise in the amount of currency and bank deposits in an economy, leading to potential changes in inflation and purchasing power.

Price Level

An index that measures the average of current prices of goods and services in an economy compared to a base year.

Value of Dollar

The buying power of the US dollar, determined by its exchange rate and inflation, affecting how much goods and services one dollar can buy.