Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C
B. D; B
C. A; B
D. B; C
Answer: B
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Refer to the table above. The current account balance is equal to
A) +$200 billion. B) +$220 billion. C) +$20 billion. D) -$220 billion. E) -$200 billion.
Pursuing comparative advantage means
A) adding up the plusses and minuses after a transaction. B) doing it to the other person first. C) making equal, fair exchanges for equally valued goods or services. D) sacrificing something less valuable for the sake of something more valuable. E) seeking relative status rather than absolute welfare.
A decline in the money supply shifts the LM curve to the left, causing the interest rate to ________ and output to ________, everything else held constant
A) rise; rise B) rise; fall C) fall; rise D) fall; fall
Assume that a computer is a normal good. An increase in consumer income, other things being equal, would:
a. cause an upward movement along the demand curve for computers. b. cause a downward movement along the demand curve for computers. c. shift the demand curve for computers to the left. d. shift the demand curve for computers to the right.