Refer to Figure 9.2. A movement from point d to point c could be caused by a(n)
A) increase in government spending. B) increase in the price of oil.
C) increase in taxes. D) increase in short-run aggregate supply.
B
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The above figure shows the costs at Barney's Bagel Bakery. As the amount of output increases, the AVC curve approaches the ATC curve because the
A) TFC curve (not shown) slopes down. B) AFC curve (not shown) slopes down. C) MC curve is rising. D) AVC curve is rising.
Under what circumstances might it be "rational" to rely on adaptive expectations?
What will be an ideal response?
The life cycle model explains saving primarily as
a) a desire to leave a bequest to one’s heirs b) a response to uncertainty regarding longevity c) a response to high real interest rates d) a response to employment and demographic changes over one’s lifetime e) the result of under-estimating real wealth
Suppose the exchange rates between the United States and Canada are in long-run equilibrium as defined by the idea of purchasing power parity. If the law of one price holds perfectly, then differences between U.S. and Canadian rates of inflation would
A) have no effect on nominal exchange rates. B) be completely offset by changes in the real exchange rate. C) be completely offset by changes in the nominal exchange rate. D) lead to a change in the real purchasing power of each country's currency when it is converted to the other country's currency.