Since World War II, the U.S. economy has been characterized by
a. extremely high rates of inflation
b. decreases in the price level
c. ongoing inflation
d. zero inflation
e. a continually falling rate of inflation
When the Federal Reserve System was first established, which of the following was its
chief responsibility?
a. Keeping the inflation rate low and stable
b. Ensuring the stability of the banking system
c. Achieving full employment of the labor force
d. Keeping the interest rate low and stable
e. Keeping output growth high and stable
If income doubles and the prices of all goods remain the same, the budget line will shift
outward by 50 percent along each axis.
If a widow is harmed by mail fraud,
One way to bring the inflation rate down is
a. to reduce excessive competition
b. to increase government spending
c. to aggregate across markets
d. for the government to purposely cause a severe recession
e. to reduce taxes
If Canada can produce 500 TV sets at the cost of 10 cars, while Mexico can produce
1,000 TV sets at the cost of 8 cars, we know the following:
a. Canada has a comparative advantage in TV production.
b. Mexico has the absolute advantage in TV production.
c. The two countries’ joint output equals 1,500 TV sets and 18 cars without trade, but it
will be higher after proper specialization and trade.
d. Canada has a comparative advantage in car production.
e. Canada produces more cars than Mexico does.
If Babette’s Bicycle shop can rebuild three bicycles for $200 and four bicycles for $240,
then the average variable cost of four bicycles
Consider a good with a price elasticity equal to 1 at every point on its demand curve.
Which of the following statements is correct?
A method of allocating scarce resources is a necessary component of
Which of the following is a reason why job A would pay a higher wage rate than job B?