The Fed issues bonds to raise money and uses it to finance the U.S. government’s
budget deficit.
A less elastic demand for a good could result from
If a variable other than the price level changes, the AD curve shifts.
Refer to Figure 8-2. The economy’s potential level of output on the graph
a. cannot be determined with this information, only actual output can be found
b. is rising
c. exceeds $8 trillion
d. is less than $8 trillion
e. equals $8 trillion
One reason why economists often appear to disagree when asked about the impact of
some bad economic news is that
a. they do not understand the economy very well
b. economics is a very difficult science, and so there are many incorrect economic
projections being made
c. economists rarely disagree; people just think they are disagreeing because they do not
understand the language of economics
d. economists often appear to be disagreeing when one is talking about long-run impact
while the other is referring to short-run impacts
e. economists are by nature competitive individuals and they often disagree
For each watch Denmark produces, it gives up the opportunity to produce 50 pounds of
cheese. France can produce two watches at a cost of 150 pounds of cheese. Which of
the following is true?
a. Denmark has a comparative advantage in producing both watches and cheese.
b. France has a comparative advantage in producing both watches and cheese.
c. France has the comparative advantage in producing watches.
d. Denmark has the comparative advantage in producing watches.
e. Denmark has the comparative advantage in producing cheese.
Under market capitalism, resources are allocated by
The efficient markets theory of stock prices, says that new information
In the short run, a negative supply shock
a. causes firms’ unit costs to decrease
b. shifts the AS curve to the right
c. causes output to decrease and the price level to increase
d. shifts the AD curve to the left
e. causes both output and the price level to decrease
In factor markets,
The marginal product of labor is the
