Using Figure 48.1, modeling the attacks of September 11, 2001, you would show the impact of higher oil prices by using
A. Panel 2 only with a shift from ASB to ASA.
B. Panel 1 only with a shift from ADA to ADB.
C. Panel 1 only with a shift from ADB to ADA.
D. Panel 1 to model the aggregate demand shock (ADB to ADA) and Panel 2 to model the aggregate supply shock (ASB to ASA).
Answer: A
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Refer to Supply and Demand. The social gain from a draft is represented by
The following questions refer to the accompanying graph, which shows the supply and demand for military service where Q0 represents the quantity provided by a volunteer army and Qd the quantity provided by a draft.
a. areas A + B + F.
b. areas A + B + F - E.
c. areas B + F.
d. Areas A + B + C + D.
People demand money for all of the following reasons EXCEPT
A) it generates a rate of return. B) it is a medium of exchange to make payments. C) it is a store of value. D) it can meet unplanned expenditures.
The formula for price elasticity of demand that is used in practice
A. usually drops all minus signs. B. usually takes on different values at different points on the demand curve. C. may calculate the percentage change in price between P1 and P2 as “(P2 ? P1) as a percentage of (P1 + P2)/2.” D. All of the responses are correct.
A sterilized central bank intervention does not affect the domestic money supply
Indicate whether the statement is true or false