In the early 2000s, Ecuador suffered high inflation because the central bank was financing a government deficit. In terms of fiscal and monetary policy, what created the problem of inflation was that Ecuador's:
A. fiscal policy was contractionary, but its monetary policy was expansionary.
B. fiscal and monetary policy were contractionary.
C. fiscal and monetary policy were expansionary.
D. fiscal policy was expansionary, but its monetary policy was contractionary.
Answer: C
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Suppose Mary is willing to pay up to $15,000 for a used Ford pick-up truck. If she buys one for $12,000, her ________ would be ________.
A. economic surplus; $12,000 B. cost; $15,000 C. benefit; $12,000 D. economic surplus; $3,000
At one point along a PPF, 50 tons of coffee and 100 tons of bananas are produced. At another point along the same PPF, 30 tons of coffee and 140 tons of bananas are produced. The opportunity cost of a ton of coffee between these points is
A) 7/5 of a ton of bananas per ton of coffee. B) 1/2 of a ton of bananas per ton of coffee. C) 5/7 of a ton of bananas per ton of coffee. D) 2 tons of bananas per ton of coffee.
In the classical model, we include unintended inventory changes
a. True b. False
In this graph, how does the expansionary policy influence aggregate demand?
a. It prevents the aggregate demand curve from moving.
b. It shifts the aggregate demand curve to the left.
c. It shifts the aggregate demand curve to the right.
d. It changes the slope of the aggregate demand curve.