According to the monetarists, the ratio of nominal GDP to the money stock should be
a. highly unstable in short run and in long run.
b. unstable only during recession.
c. unstable only in the long run.
d. quite stable in the short run and the long run.
e. unstable only if the LM curve shifts.
D
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Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
Consider the market for wheat which is a perfectly competitive market. Is the market demand curve the same as the demand curve facing an individual producer? If not, explain how and why they are different? Illustrate your answer graphically
What will be an ideal response?
Refer to the table below. If the profit for each unit of paper product is $2 and the profit for each unit of lumber is $5, what is Big Oaks' marginal cost of producing between points B and C on their production possibilities frontier?
Big Oaks can produce either paper products or lumber with each tree that they harvest. Because Big Oaks can adjust the amount of paper products and lumber they produce from the harvested trees, paper products and lumber are produced in variable proportions. The above table summarizes Big Oaks production possibilities from each harvested tree.
A) $1.25
B) $6.25
C) $5.50
D) $2.50
The Federal Open Market Committee (FOMC):
A. sets policy on the sale and purchase of government bonds by the Fed. B. monitors regulatory banking laws for member banks. C. follows the actions and operations of financial markets to keep them open and competitive. D. provides advice on banking policy to the Fed.