A decrease in the price of pizza will lead to a(n):
A. increase in the demand for pizza.
B. decrease in the number of consumers.
C. decrease in the quantity of pizza demanded.
D. increase in the quantity of pizza demanded.
Answer: D
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Economic growth will tend to be higher in a country that
a. has a low savings rate. b. has an open economy that encourages the rapid spread of technology. c. has an undeveloped system of property rights. d. does not grant patents to investors.
The balance of payments has become a central issue for the United States because
A) when the balance of payments is not balanced, society is unbalanced. B) the U.S. economy cannot grow when the balance of payments is in deficit. C) the U.S. has run huge trade deficits in every year since 1982. D) the U.S. never experienced a surplus in its balance of payments. E) the U.S. once ran a large trade surplus of about $40 billion.
What is implied when the wage-schooling profile is drawn as a concave (i.e., increasing at a decreasing rate) function?
A. Average wages fall as years of schooling increases. B. The cost of schooling decreases but at an increasing rate. C. The cost of schooling increases but at a decreasing rate. D. The marginal return to schooling increases as years of schooling increases. E. The marginal return to schooling is positive but falling as years of schooling increases.