The price of a loaf of bread is $1.50, the price of a gallon of milk is $3.00, and the price of a pound of butter is $2.40. The price of a loaf of bread relative to a gallon of milk is ________, while the price of a gallon of milk relative to a pound of
butter is ________.
A) 0.5; 0.8.
B) 0.5; 1.25.
C) 2.0; 1.25.
D) 2.0; 0.8.
Answer: B
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The interest rate is the price borrowers pay to borrow money. Key interest rates are controlled by the Federal Reserve System. If the Federal Reserve acts to reduce interest rates, economists would expect the demand for money to
A. increase. B. decrease. C. not change. D. be influenced by the interest rate, but with an uncertain effect.
Under which of the following conditions will a change in government purchases have the greatest effect on the economy in the short run?
a. The aggregate demand curve is relatively flat. b. The aggregate demand curve is relatively steep. c. The short-run aggregate supply curve is relatively flat. d. The aggregate demand curve is vertical. e. The short-run aggregate supply curve is vertical.
If the economy is on the production possibilities frontier (PPF), the economy is
A) productive inefficient. B) operating with no unemployed resources. C) productive efficient. D) b and c E) none of the above
The imposition of an import quota shifts
a. the supply of currency right, so the exchange rate falls. b. the supply of currency left, so the exchange rate rises. c. the demand for currency right, so the exchange rate rises. d. the demand for currency left, so the exchange rate falls.