Over the 1981-1991 Decade,had the U

question 119

Multiple Choice

Over the 1981-1991 decade,had the U.S.current account been in zero balance,the total income of Americans from their net investment position would have been about

• A)10 percent higher.
• B)1 percent higher.
• C)1 percent lower.
• D)10 percent lower.

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Definitions:

Marginal Rate of Substitution

The rate at which a consumer is willing to give up one good in exchange for another while maintaining the same level of utility or satisfaction.

Utility Maximization

The economic principle that individuals or firms aim to achieve the highest level of utility or satisfaction possible from their consumption or production choices, given their constraints.

Equilibrium Position

In the indifference curve model, the combination of two goods at which a consumer maximizes his or her utility (reaches the highest attainable indifference curve), given a limited amount to spend (a budget constraint).

Normal Good

A product whose demand increases when consumer income rises and falls when consumer income decreases.