Which of the following is an example of a positive statement?
A. Ceteris paribus, a teacher should award a higher grade if you study more hours for an economics test.
B. When the price of an item increases, people respond by reducing their consumption of the item.
C. The government should balance the budget.
D. It is too hot to go jogging.
Answer: B
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Suppose the desired reserve ratio is 20 percent and there is no currency drain. Then a $1 increase in the monetary base leads to the banking system to increase the quantity of money by
A) $0.02. B) $4. C) $5. D) $20. E) $2.
If expected inflation rises, the long-run Phillips curve will
A) become negatively sloped. B) shift to the left. C) shift to the right. D) not be affected.
If the bidders at a second-price auction have true values of $78, $72, $66, and $65, the item will sell for
a. $78 b. just under $78 c. $72 d. just over $72
One city that has repealed many of its rent-control laws is
A. Miami. B. San Jose. C. New York. D. Boston.