In the Aggregate Demand - Aggregate Supply diagram in Figure 8.1, Box 5 should be filled with 
A. PI* for macroeconomic equilibrium Price Index.
B. RGDP* for macroeconomic equilibrium Real Gross Domestic Product.
C. AD for Aggregate Demand.
D. AS for Aggregate Supply.
Answer: B
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When Bank of America finances your purchase of a new car, you are
A) borrowing in the stock market. B) lending in the bond market. C) lending in the capital market. D) borrowing in the loan market. E) borrowing in the bond market.
The immediate, direct effect of someone's cashing a check at a commercial bank is
A) a decrease in the stock of money (M1). B) an increase in the stock of money (M1). C) no change in the stock of money. D) unknown until the check casher spends the currency withdrawn from the bank.
As the number of firms in the oligopoly grows very large, the
a. output effect disappears. b. price effect disappears. c. output effect equals the price effect. d. price of the product greatly exceeds marginal cost.
Union contracts with built-in cost-of-living adjustments and home mortgages that vary with the rate of inflation are:
A. examples of failed policies of the 1970s. B. examples of bracket creep. C. means of implementing fiscal policy. D. steps that can be taken to decrease the adverse impacts of inflation.