Which of the following would not cause a movement along the AD curve?
a. An increase in the price level.
b. A decrease in the price level.
c. A change in the interest rate caused by a change in the price level.
d. A change in autonomous consumption
e. Both a change in the interest rate caused by a change in the price level, and a change
in autonomous consumption.
If the price of gasoline rises at the Exxon gas station at a busy intersection, the Mobil
station at the same intersection will experience
When the Federal Reserve buys new government bonds, it is borrowing from the
government.
In what sense is it a cost that people must spend time and resources coping with
inflation?
a. Because the loss of time and resources frustrates people unnecessarily
b. Because the time and resources could have been used to produce something else
instead
c. Because the time and resources could have been wasted elsewhere
d. Because the time and resources are a sunk cost
e. Because the time and resources are insufficient to cope with the problem
Two reasons why an economy might operate inside of its production possibilities
frontier are
The cross-price elasticity of demand is measured by the
A positive demand shock will
a. shift the AD curve to the left.
b. increase real GDP and the price level in the short run.
c. decrease real GDP and the price level in the short run.
d. increase real GDP and decrease the price level in the short run.
e. decrease real GDP and increase the price level in the short run.
A labor market is divided into two segments. All workers have the same qualifications
and find jobs in either segment equally attractive. Initially, both segments are in
competitive equilibrium. Then the development of employer prejudice reduces
employment of minorities in one segment. In the long run, there will likely be a change
in
What trade-off must be considered when deciding how much of your wealth is to be
held as money relative to bonds?
a. Bonds pay more interest and are easier to use for payment.
b. Bonds pay less interest but are less convenient.
c. Bonds pay more interest but are less convenient relative to money.
d. Money pays less interest and is less convenient to use.
e. Money pays more interest and is less convenient to use.
A country currently is using all its land to produce wheat and grapes. However, the land
most suited to growing grapes is being used to produce wheat, and the land most suited
to growing wheat is being used to produce grapes. This is an example of
If there is an excess supply of money, there is an excess
a. demand for bonds and the price of bonds will decrease
b. supply of bonds and the price of bonds will decrease
c. supply of bonds but the price of bonds will not change
d. supply of bonds and the price of bonds will increase
e. demand for bonds and the price of bonds will increase
If the price of a bond increases, the interest rate (or rate of return on the bond)
decreases.
As Reba consumes four slices of pizza, her total utility rises from 0 to 18, to 24, to 28,
and to 30, respectively. What is her marginal utility of the fourth slice of pizza?
A decrease in the government’s budget deficit will
a. increase the supply of loanable funds, lower the interest rate, and increase investment
spending
b. reduce the supply of loanable funds, raise the interest rate, and reduce investment
c. increase the demand for loanable funds, raise the interest rate, and reduce investment
spending
d. reduce the demand for loanable funds, lower the interest rate, and increase
investment spending
e. increase the supply of loanable funds, reduce the demand for loanable funds, leave
the interest rate unchanged, and increase investment spending
Suppose that (1) LRATC is minimized at $60 when 30,000 units are being produced,
(2) the quantity demanded at a price of $60 is 150,000 units, and (3) there are currently
10 firms producing in the market. Then,