The following figure shows the free-trade production and consumption in Country Y. AB is the production-possibility curve of Country Y. I1 is the community indifference curve of Country Y. Country Y exports
A. seventy pounds of cheese.
B. fifty gallons of wine.
C. fifty pounds of cheese.
D. ninety gallons of wine.
Answer: C
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Expansionary fiscal policy can be used to reduce unemployment by
A) increasing long-run aggregate supply so as to raise real GDP. B) increasing aggregate demand so as to raise real GDP. C) reducing nominal wages so as to encourage firms to hire more workers. D) eliminating inefficiencies from labor markets.
If you can figure out what people's__________ are, there is a good chance you can predict their behavior
a. birthdays b. incentives c. total costs d. marginal costs
If firms are experiencing falling inventories, one can expect that firms will cut production
a. True b. False Indicate whether the statement is true or false
If the nominal interest rate decreases:
A. the velocity of money should increase. B. the cost of holding money increases. C. the cost of holding money decreases. D. the cost of holding money increases and the velocity of money should decrease.