Which of the following observations is true of subsidies?
a. They act as barriers to trade
b. They reduce the amounts of actual labor, raw material, and capital costs of production.
c. They are capable of distorting trade patterns.
d. They reduce inefficiencies.
c
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Use the following figure to answer the next question.
In the figure, AD2 and AS2 represent the original aggregate supply and demand curves. If Q3 is full-employment output, then AD2 and AS1 best represent a period of ________.
A. hyperinflation B. expansion C. low unemployment D. stagflation
Which of the following would be primarily determined in factor markets? a. The number of computers produced
b. The wage rates for high school teachers. c. The price of automobiles. d. Sales tax revenues.
If the money supply in the economy were at MS3, to engage in expansionary policy the Federal Reserve Bank would use open market operation to move money supply to:
A. MS2 B. MS1 C. it would stay at MS3 D. MS4
According to John Maynard Keynes,
a. the demand for money in a country is determined entirely by that nation's central bank. b. the supply of money in a country is determined by the overall wealth of the citizens of that country. c. the interest rate adjusts to balance the supply of, and demand for, money. d. the interest rate adjusts to balance the supply of, and demand for, goods and services.