A quota typically increases the volume of imports, whereas a tariff typically decreases
the volume of imports.
The means of payment function of money refers to the common unit for measuring how
much something is worth
If the required reserve ratio is 0.2, what is the demand deposit multiplier?
a. 10.0
b. 0.4
c. 5.0
d. 2.5
e. 1.67
An increase in the price level will lead to which of the following sequences?
a. The money demand curve shifts leftward, the interest rate drops, the aggregate
expenditure line shifts upward, and there is movement downward along the aggregate
demand curve.
b. The money demand curve shifts rightward, the interest rate increases, the aggregate
expenditure line shifts downward, and there is movement upward along the aggregate
demand curve.
c. The money demand curve shifts leftward, the interest rate drops, the aggregate
expenditure line shifts downward, and there is movement upward along the aggregate
demand curve.
d. The money demand curve shifts rightward, the interest rate increases, the aggregate
expenditure line shifts upward, and there is movement downward along the aggregate
demand curve.
e. the money demand curve shifts leftward, the interest rate drops, the aggregate
expenditure line shifts upward, and there is movement upward along the aggregate
demand curve.
In Figure 3-4, the equilibrium price is
The fact that total wealth is fixed at any point in time is referred to as the
a. budget constraint.
b. wealth constraint.
c. wealth effect.
d. hard asset effect.
e. income effect.
Referring to Figure 2-13, if you had to choose how to allocated $5 million and your
objective was to save the most lives, you would observe that there is
Figure 2-13
Total Lives Saved
An economic system includes
The Marginal Cost curve will
Over the past 90 years or so, the inflation rate has
a. generally increased
b. been positive in most years
c. stayed low
d. been negative in most years
e. dramatically increased
The most dramatic and rapid increases and decreases in exchange rates occur in the
a. very short run
b. short run
c. long run
d. very long run
e. triangular arbitrage market
The value of the expenditure multiplier in the long run is
a. 1
b. 0
c. -1
d. equal to the MPC
e. equal to the 1/MPC