The opportunity cost of holding money is measured by A) the interest yield that could have been earned by holding some other asset. B) the liquidity of interest-bearing assets. C) the price of government bonds. D) a dollar. ANSWER A
Date: September 2nd, 2020
John is expecting to get a hike in his monthly salary after three months. Assuming all else equal, this is likely to cause a(n) ________ his current credit demand curve. A) leftward shift in B) upward movement along C) rightward shift in D) downward movement along ANSWER C
Date: September 2nd, 2020
Why do policymakers sometimes use policies to limit growth? What will be an ideal response? ANSWER Policymakers sometimes use policies to limit growth because factors such as irrational optimism about the economy lead to unsustainable expansion. Left alone, unsustainable expansions can subsequently lead to very severe downturns because irrational optimism can implode suddenly and […]
Date: September 2nd, 2020
The demographic transition refers to the: A) decrease in fertility and number of children per family that many societies undergo as they transition from industry to agriculture. B) decrease in fertility and number of children per family that many societies undergo as they transition from agriculture to industry. C) increase in fertility and number of […]
Date: September 2nd, 2020
According to the text, approximately what percentage of U.S. net public debt is held by foreign residents? A) 50% B) 20% C) 90% D) 800% ANSWER A
Date: September 2nd, 2020
The economy of Budopia is going through a recession. How will a countercyclical policy affect the labor market in Budopia if wages are flexible? Explain with a diagram. What will be an ideal response? ANSWER Starting from a pre-recession equilibrium labeled as point E1 in the diagram below, the labor demand curve of Budopia […]
Date: September 2nd, 2020
What will happen to the equilibrium price and quantity of cars if there is an increase in the price of gasoline? What will be an ideal response? ANSWER An increase in the price of gasoline will cause a left shift in the demand for cars, keeping supply unchanged. With supply unchanged and a left […]
Date: September 2nd, 2020
The short-run aggregate supply curve is a relationship between A) real GDP and price level. B) capital goods and consumer goods. C) unemployment and real GDP. D) inflation and time. ANSWER A
Date: September 2nd, 2020
Rapid population growth in Malthus’s theory is constrained through: A) higher fertility and reduced mortality. B) reduced fertility and higher mortality. C) higher fertility and mortality. D) reduced fertility and mortality. ANSWER B
Date: September 2nd, 2020
The most liquid asset is A) a house. B) stocks of a highly profitable company. C) gold. D) money. ANSWER D
Date: September 2nd, 2020
