An increase in government spending will
A. increase the slope of the IS curve.
B. shift the IS curve to the left.
C. shift the IS curve to the right.
D. shift the LM curve to the right.
Answer: C
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Using the above figure, which of the following is CORRECT?
A) 1 guilder will sell for $2. B) 1 dollar will sell for 1/2 guilder. C) A shortage of guilders exists at an exchange rate above $0.60. D) A surplus of guilders exists at an exchange rate above $0.60.
Both the precautionary and asset demand for money are influenced by
A) the U.S. Treasury. B) the interest rate. C) gold prices. D) none of the above.
The largest six Americans unions each has at least _____ members.
Fill in the blank(s) with the appropriate word(s).
Two firms, Industrio and Capitalista, have access to five production processes, each of which has a different cost and gives off a different amount of pollution. The daily costs of the processes and the corresponding number of tons of smoke emitted are shown in the table below. Both firms currently use process A, and each emits 4 tons of smoke per day. The government is considering two plans to reduce pollution: requiring both firms to reduce pollution by 25 percent or auctioning pollution permits. Each permit would entitle the owner to emit one ton of smoke per day. Without a permit, no smoke can be emitted.ProcessABCDE(smoke/day)(4 tons/day)(3 tons/day)(2 tons/day)(1 tons/day)(0 tons/day)Cost to Industrio ($/day)$350$400$500$700$1,000Cost to Capitalista
($/day)$225$250$290$400$600 Suppose the government decides to sell 6 permits allowing a total of 6 tons of pollution. The government starts the bidding with an opening price of $30. What happens next? A. A total of five permits will be demanded, forcing the government to lower the price. B. Industrio will purchase all available permits at $30. C. A total of seven permits will be demanded, forcing the government to raise the price. D. Industrio will demand 3 permits and Capitalista will demand 3 permits.