Economists use the term inflation to describe a situation in which the economy's overall price level is rising
a. True
b. False
Indicate whether the statement is true or false
True
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Refer to Figure 2.1. If you are producing 600 tons of agricultural products per year, what is the maximum amount of manufactured products you can produce per year?
A) 300 tons B) 500 tons C) 600 tons D) 700 tons
A perfectly price inelastic supply curve is:
a. horizontal. b. nonlinear and upward sloping. c. vertical. d. a straight line from the origin.
Consider the accompanying payoff matrix.
Is this game a prisoner's dilemma?
A. It's a prisoner's dilemma for player B, but not for player A. B. It's a prisoner's dilemma for player A, but not for player B. C. No. D. Yes.
The government wishes to reduce he price level by reducing real GDP by $400 billion. Assuming a tax multiplier of 4 and a government spending multiplier of 5, which of the following policy prescriptions would reduce the aggregate demand curve by $400 billion?
A. Decreasing government spending by $400 billion and increasing taxes by $100 billion. B. Decreasing government spending by $160 billion and decreasing taxes by $100 billion. C. Decreasing government spending by $40 billion and decreasing taxes by $40 billion. D. Decreasing government spending by $100 billion and keeping taxes the same.