The opportunity cost of more consumption of goods today is
A) lower consumption of goods in the future.
B) fewer capital goods in the future.
C) more capital goods today.
D) more unemployment both today and in the future.
Answer: A
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
Based on historical data, which of the following tended to be most variable over time?
A) real investment spending B) the average propensity to consume C) real consumption spending D) real saving
The idea that anticipated monetary policy changes cannot affect real GDP or employment is known as
A) the systematic policy hypothesis. B) the policy irrelevance theorem. C) the policy relevance theorem. D) the Keynesian hypothesis.
Assume the market in the graph shown was originally at an equilibrium with demand D and supply S. The original equilibrium price and quantity were, respectively:
A. $5 and 30. B. $10 and 20. C. $5 and 20. D. $20 and 10.