Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost for the United States is:
A. 5 apples for each pair of shoes.
B. 5 pairs of shoes for each apple.
C. 1/5 apple for each pair of shoes.
D. 1 pair of shoes for every 2 apples.
A. 5 apples for each pair of shoes.
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Refer to the scenario above. What is the number of unemployed workers in the economy?
A) 1 million B) 2 million C) 3 million D) 4 million
If the marginal propensity to consume in a country is 0.6, then a $4,000 decrease in taxes will lead to a _____ in real GDP
a. $4,000 decrease b. $6,000 increase c. $4,000 increase d. $6,000 decrease
Like the human body, an economy is made up of many small, specialized, interactive parts; like blood circulates in a human body, money circulates through an economy, providing necessary resources for both households and firms
Indicate whether the statement is true or false
A problem that the Fed faces when it attempts to control the money supply is that
a. since the U.S. has a fractional-reserve banking system, the amount of money in the economy depends in part on the behavior of depositors and bankers.
b. the Fed has to get the approval of the U.S. Treasury Department whenever it uses any of its monetary policy tools.
c. while the Fed has the ability to change the money supply by a large amount, it does not have the ability to change it by a small amount.
d. federal legislation in the 1950s stripped the Fed of its power to act as a lender of last resort to banks.