Refer to Figure 35.6: If S1 represents the U.S. domestic supply of a good, what does S2 most likely represent?
A. Production possibilities under conditions of free trade.
B. U.S. supply under tariff-restricted trade.
C. The result of a foreign country dumping this good on the U.S. market.
D. U.S. supply under quota-restricted trade.
Answer: D
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The Keynesian model differs from the classical model in that
a. people do not have perfect information about the future in the Keynesian model. b. real wages are not flexible in the Keynesian model. c. monetary policy affects aggregate demand in the Keynesian model. d. expectations are crucial in the classical model. e. all of the above.
If the demand for loanable funds shifts to the left, then the equilibrium interest rate
a. and quantity of loanable funds rises. b. and quantity of loanable funds falls. c. rises and the quantity of loanable funds falls. d. falls and the quantity of loanable funds rises.
Which of the following statements is true?
A. Perfect competition is an unattainable standard that is probably impossible to find. B. Very few business firms have any control over price in perfect competition. C. The determination whether two products are identical is done by the sellers. D. Perfect competitors are price makers.
The marginal propensity to consume must always be larger than the marginal propensity to save.
Answer the following statement true (T) or false (F)