Consumers increased consumption by a relatively small amount in 2008 and 2009 because they believed the tax cuts were temporary
a. True
b. False
Indicate whether the statement is true or false
True
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Which of the following is the best example of a pair of substitute goods?
A) coffee and cream B) videotapes and VCRs C) money and biscuits D) tortillas and salsa E) powdered and liquid laundry detergent
Suppose the price of capital and labor remain constant but that the average educational level of workers has increased and therefore, productivity of labor increases. This would lead a firm
A) to adopt a more capital-intensive production technology. B) to keep its output and production technology unchanged, but to use fewer units of labor. C) to adopt a more labor-intensive technology. D) to use only labor to produce the product.
Suppose that a rules-based monetary policy proposal specifies that the money supply will grow 3 percent each year. If velocity grows 1 percent this year and Real GDP grows 2 percent, the price level will __________ by __________ percent
A) rise; 3 B) fall; 2 C) rise; 2 D) rise; 6 E) fall; 5
Suppose you operate in a monopolistically competitive market. If you sell your good at a price of $20 and your average cost of production is $15:
A. your market may be in long-run equilibrium. B. you cannot be in short-run equilibrium. C. you should expect competing firms to enter your market and shift the demand curve for your good to the left. D. you should expect competing firms to enter your market and shift the demand curve for your good to the right.