Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point D to Point B, the opportunity cost of hybrid cars, measured in terms of motorcycles,
A. initially increases, then decreases.
B. increases.
C. remains constant.
D. decreases.
Answer: B
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Suppose that your marginal federal income tax rate is 30%, the sum of your marginal state and local tax rates is 5%, and the yield on a thirty-year corporate bond is 10%
You would be indifferent between buying this corporate bond and buying a thirty-year municipal bond issued within your state (ignoring differences in liquidity, risk, and costs of information) if the municipal bond has a yield of A) 6.5%. B) 7.0%. C) 9.5%. D) 10.0%.
What are three reasons people want to hold money balances?
What will be an ideal response?
According to Hume's price-specie-flow mechanism, a sudden increase in the money stock of Country A:
a. causes an immediate deflation in Country A. b. leads to an increase in Country A's imports relative to its exports. c. leads to an increase in Country A's exports relative to its imports. d. causes specie from the rest of the world to flow into Country A.
Refer to Figure 16.2. For the given Phillips curve, an increase in aggregate demand, ceteris paribus, could cause a
A. Movement from point B to point A. B. Movement from point A to point B. C. Rightward shift in the curve. D. Leftward shift in the curve.