Exhibit 16-1 Money market demand and supply curves
Beginning from an equilibrium at E1 in Exhibit 16-1, a decrease in the money supply from $150 billion to $100 billion causes people to:
A. sell bonds and drive the price of bonds down.
B. sell bonds and drive the price of bonds up.
C. buy bonds and drive the price of bonds down.
D. buy bonds and drive the price of bonds up.
Answer: A
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If indifference curves and budget lines are used to analyze consumer choice, an inferior good will
A. escape detection when income rises. B. be easily identified because the quantity purchased will fall as income rises. C. be easily identified because the quantity purchased will rise as income rises. D. be easily identified because it will change the slope of the budget line. E. escape detection because this model does not show that relationship.
Mark Zuckerberg believes everyone in the world should have Internet access
A) This is a positive statement and is not in the social interest if the marginal benefit of Internet access exceeds the marginal cost. B) This is a positive statement and is not in the social interest if the marginal cost of Internet access exceeds the marginal benefit. C) This is a normative statement and is not in the social interest if the marginal benefit of Internet access exceeds the marginal cost. D) This is a normative statement and is not in the social interest if the marginal cost of Internet access exceeds the marginal benefit.
Except for recessions, the duration of unemployment for the typical person lasts
A) less than six months. B) six to nine months. C) over nine months. D) over one year. E) over five years.
If you believe that government intervention to achieve full employment without inflation can be effective, you are a member in good standing in the
a. Phillips school b. classical school c. Keynesian school d. neo-Keynesian school e. rational expectations school