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    Indifference curves and government economic activity

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    Indifference curves can intersect if
    A. the consumer is poorly educated
    B. the two goods are high priced
    C. the consumer's income is very low
    D. all of thee above
    E. none of the above

    if the expected return from an investment is plotted along the vertical axis and the riskiness of the investment is plotted along the horizontal axis, the indifference curve of the investor will be positively sloped if
    A. the investor doesn't care what rate of return he or she receives
    B. the investor doesn't care how risky an investment is
    C. the investor prefers a more risky to a less risky investment, when the expected rate of return is held constant
    D. all of the above
    E. none of the above

    the use of government purchases, transfer payments, taxes and borrowing to influence aggregate economic activity such as inflation, employment, and economic growth is called
    A. monetary policy
    B. fiscal policy
    C. cross dollar exchange
    D. all of the above

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    Solution Preview

    indifference curves can intersect if
    A. the consumer is poorly educated
    B. the two goods are high priced
    C. the consumerâ??s income is very low
    D. all of thee above
    E. none of the above
    Answer: None of these.
    An investor's indifference curves are parallel, and thus cannot intersect and have ...

    Solution Summary

    This post discusses indifference curves and government economic activity such as taxes and transfer payments

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