One way the government can boost the economy out of a recession is:
A. with public announcements telling the public to save their money.
B. by increasing government spending.
C. by setting price ceilings on most goods so people can afford them.
D. None of these will help an economy in recession.
Answer: B
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Assume the market is in equilibrium in the graph shown at demand D and supply S1. If the supply curve shifts to S2, and a new equilibrium is reached, equilibrium quantity will increase from 4 to 4.5 units. Which of the following is true?
A. Producer surplus increases by $3.00.
B. Producer surplus decreases by $8.50.
C. Producer surplus increases by $7.50.
D. Producer surplus decreases by $16.
If the firm represented in the diagram is currently producing and selling Q a units, what is the price charged?
A. P0 B. P1 C. P2 D. P3
According to the Taylor rule, if the inflation rate in the last year was 2% and output was equal to its full-employment level, the nominal Fed funds rate should be
A. 3%. B. 5%. C. 4%. D. 6%.
If you buy a gift without knowing what a person really wants or needs, you have demonstrated:
A. the incentive problem of gift-giving. B. the necessity-identification problem of gift-giving. C. the knowledge problem of gift-giving. D. the negative trade problem of gift-giving.