If the price of a slice of pizza falls from $2 to $1.5, a pizza-loving consumer will
A) see her purchasing power fall.
B) see her purchasing power rise.
C) substitute more Chinese food for pizza.
D) spend more on soft drinks and less on pizza.
Answer: B
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If the equilibrium price level is 135 but the actual price level is 150, then
A) firms increase their production because they are able to sell their output at a higher than expected price. B) aggregate demand will decrease to restore equilibrium. C) aggregate demand will increase to restore equilibrium. D) the quantity of real GDP demanded is less than the quantity of real GDP supplied. E) the quantity of real GDP demanded is greater than the quantity of real GDP supplied.
Monopoly firms have a downward sloping curve in the short-run because
a. They have no close substitutes b. There are no barriers to entry c. They have no cost advantage over their rivals d. None of the above
Which length of time of unemployment was the highest percentage reported in February 2015?
a. less than 5 weeks b. 5 to 14 weeks c. 15 to 26 weeks d. more than 27 weeks
Suppose you are analyzing data for an economy in which Ricardian neutrality holds true. What happens if the budget deficit increases by 50?
a. Investments will increase by 50. b. Investments will decrease by 50. c. Private savings will decrease by 50. d. Private savings will increase by 50.