If there is a shortage in the market for automobiles, then
a. producers' inventories will rise
b. the price should begin to rise
c. the demand curve will shift to restore equilibrium in the market
d. the supply curve will shift to restore equilibrium in the market
e. the price is expected to fall
B
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In a closed economy, without the government:
A) savings equals net exports. B) consumption equals investment. C) consumption equals savings. D) savings equals investment.
The process of countries becoming more open to foreign trade and investment is known as
A) autarky. B) globalization. C) protectionism. D) foreign exchange.
Assume MUX = 30 utils, MUY = 15 utils, PX = $2, and PY = $0.50 . This consumer:
a. should buy less of X and less of Y. b. is in equilibrium. c. should buy more of X and less of Y. d. should buy less of X and more of Y. e. should buy more of X and more of Y.
Suppose an economist believes that the price level in the economy is directly related to the money supply, or the amount of money circulating in the economy. The economist proposes the following relationship: P=A×M • P=Price Level • M=Money Supply • A=A composite of other factors, including real GDP, that change very slowly over time. How might an economist gather empirical data to test the proposed relationship between money and the price level?
A. Unlike researchers in the hard sciences, economists cannot study complex relationships using data. B. An economist would look for data on past changes in the money supply, and note the resulting changes in the price level C. An economist would persuade the Federal Reserve to change the money supply to various levels, and observe the resulting changes in the price level. D. Economists do not usually develop theoretical models of the economy but only analyze summary statistics about the current state of the economy.