If an economy at the equilibrium level of GDP experiences an increase in the amount of investment spending, then inventories will be
A. depleted, causing firms to cut production.
B. accumulated, causing firms to cut production.
C. depleted, causing firms to increase production.
D. accumulated, causing firms to expand production.
Answer: B
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Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________, 
A. Rising; B; C B. Falling; A; C C. Falling; A; B D. Rising; A; C
Tom says the economy should focus more on producing fun things people can buy if it is going to grow. Sam says if the economy is going to grow, it should consume less now and invest in education, factories, and research. Who is right and why?
What will be an ideal response?
If protective import-restricting tariffs are imposed by a country, in the majority of cases that nation's consumers end up
A) paying a higher price for the good than they otherwise would. B) paying a lower price for the good than they otherwise would. C) consuming more of the good than they otherwise would. D) having a higher standard of living than they otherwise would.
Using the HO model, assume that the United States is capital abundant and Mexico is labor abundant. If soybeans are capital intensive and avocados are labor intensive,
A) Mexico will produce more soybeans once trade is introduced. B) the United States will produce more avocados once trade is introduced. C) avocado prices in the United States will fall once trade begins. D) soybean prices in Mexico will rise once trade begins.