A decrease in the price level results in a(n) ________ in the quantity of real GDP demanded because a lower price level ________ consumption, investment, and net exports
A) decrease; decreases B) increase; increases
C) increase; decreases D) decrease; increases
B
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In addition to the items one must give up in order to afford the cost of cigarettes, the opportunity cost of smoking includes
a. your enjoyment from smoking b. the health effects one places upon others c. your expected health effects and shortened life span d. harassment from nonsmokers e. smoking cessation advertising on television
When the economy is experiencing inflation, an economist who follows the functional finance theorem is most likely to suggest that the government should:
A. run a balanced budget. B. run a deficit. C. do nothing. D. run a surplus.
For heavily traded assets like stocks and bonds, arbitrage:
A. will equalize rates of return across all stocks and bonds. B. will drive up rates of return on all assets. C. is a lengthy process because of the large volume of transactions. D. will often equalize rates of return among similar assets within minutes.
Which of the following could result in negative disembodied technical change?
A. health regulations B. safety regulations C. environmental regulations D. all of the above