In the IS-LM-BP model, when the price variable decreases, the
A) LM curve shifts out.
B) IS curve shifts out.
C) LM curve shifts in.
D) BP curve shifts up.
A
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Refer to the figure below. Assume demand remains unchanged at D1. If supply shifts from S2 to S1, then the equilibrium price will ________ and the equilibrium quantity will ________. 
A. rise; rise B. rise; fall C. fall; fall D. fall; rise
In the absence of the negative externality from each individual's contribution to road congestion, roads would not be congested (aside from congestion caused by accidents).
Answer the following statement true (T) or false (F)
Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed. What is Ernie's total variable cost?
A) $2,400 B) $2,000 C) $1,600 D) $800
In the basic closed-economy ISLM model, the IS curve can be described by an equation where
A) output is a function of consumption. B) money is a function of interest rates. C) output is a function of money. D) output is a function of interest rates.