If a country wants to prevent its exchange rate from falling, it could:
A. place restrictions on imports.
B. remove restrictions on imports.
C. remove any subsidies on exports.
D. pursue easier monetary policy.
Answer: A
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Suppose that in a PPF graph, wheat is on the vertical axis and jets are on the horizontal axis. Moving down along the PPF, the
A) number of jets increases and the opportunity cost of jets decreases. B) number of jets increases and the opportunity cost of jets increases. C) opportunity cost of jets and wheat both increase. D) amount of wheat increases and the opportunity cost of wheat increases. E) amount of wheat increases and opportunity cost of wheat decreases.
Figure 9-16
shows that the profit-maximizing output level is
a.
0.
b.
25.
c.
75.
d.
200.
Refer to the graph shown. In the graph, if the price level is P0 and the aggregate demand curve is AD0, then the economy is in:
A. a recessionary gap. B. an inflationary gap. C. a short-run equilibrium but not a long-run equilibrium. D. a long-run equilibrium.
Which of the following has the highest price elasticity of demand?
A. Medical care B. Restaurant meals C. Bread D. Household electricity