The classical model makes little distinction between the long run and short run because A) wages and prices adjust so fast that the economy is quickly moving towards the long run. B) the model has not been fully developed yet. C) current changes influence the long run, so it is not possible to plan for […]
Date: September 2nd, 2020
The aggregate demand curve gives the A) planned purchase rates for all goods and services in the economy at various price levels. B) demand for goods and services by the government at various price levels. C) amount of all goods everyone wants to buy at various income levels. D) planned purchases for all goods and […]
Date: September 2nd, 2020
The demand schedule for a commodity illustrates how the consumption of a commodity changes with changes in: A) its price. B) tastes and preferences. C) supply. D) income. ANSWER A
Date: September 2nd, 2020
All the following actions represent fiscal policy EXCEPT A) an increase in government spending. B) a reduction in individual income tax rates. C) a reduction in the money supply by the Federal Reserve. D) an increase in corporate income tax rates. ANSWER C
Date: September 2nd, 2020
The ________ plots the relationship between prices and the quantity that buyers are willing to purchase. A) supply curve B) isoquant C) indifference curve D) demand curve ANSWER D
Date: September 2nd, 2020
The development of a strain of wheat that will yield two crops per year rather than one crop per year is an example of economic growth resulting from A) increased gross investment. B) technological progress. C) an increase in per capita real income. D) capital accumulation. ANSWER B
Date: September 2nd, 2020
Which of the following theories predicts that current consumption increases when a person expects an increase in future income? A) the life-cycle theory of consumption B) the Keynesian theory of consumption C) the permanent income hypothesis D) all of the above ANSWER D
Date: September 2nd, 2020
In the classical model, the aggregate supply curve A) is not related to the employment rate. B) is horizontal. C) is positively sloped. D) is consistent with the natural rate of unemployment. ANSWER D
Date: September 2nd, 2020
The open economy effect suggests that A) a decrease in domestic price level will cause foreign residents to buy more domestic goods, increasing net exports. B) a rise in domestic price level will cause domestic residents to buy fewer imported goods. C) a rise in domestic price level will cause foreign residents to buy more […]
Date: September 2nd, 2020
The demand curve for most goods is normally: A) parallel to the vertical axis. B) parallel to the horizontal axis. C) upward sloping. D) downward sloping. ANSWER D
Date: September 2nd, 2020
