Ceteris paribus, if incomes increase faster in the United States than in less developed countries, then the currencies of less developed countries should
A. Depreciate, and the dollar should appreciate.
B. Appreciate, and the dollar should depreciate.
C. Appreciate, and the dollar should appreciate.
D. Depreciate, and the dollar should depreciate.
Answer: B
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Ceteris paribus, deficit spending results in higher interest rates, which can
A) ultimately have a positive impact on productivity gains and society's standard of living. B) accelerate growth in investment spending. C) crowd out private investment. D) increase the wealth of future generations.
In the circular flow diagram, firms get their ability to pay for the costs of production from the
What will be an ideal response?
The figure below shows the demand curve, marginal revenue curve, marginal cost curve and average total cost curve for a monopolist. 
At the socially optimal level of output, this monopolist would:
A. incur an economic loss of $64. B. incur an economic loss of $112. C. earn an economic profit of $16. D. incur an economic loss of $16.
(Figure: Guns and Butter) Look at the figure Guns and Butter. On this figure, points A, B, E, and F:
A) show that the opportunity cost of more guns increases but that of more butter decreases. B) indicate that society wants butter more than it wants guns. C) indicate constant costs for guns and increasing costs for butter. D) indicate combinations of guns and butter that society can produce using all of its factors efficiently.