An economic model is a realistic depiction of the operation of the economy
a. True
b. False
Indicate whether the statement is true or false
False
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You have just read that the Federal Reserve has increased the money supply to avoid a recession. For a given price level, you would expect the LM curve to
A) shift up and to the left as the real money supply falls. B) shift up and to the left as the real money supply rises. C) shift down and to the right as the real money supply falls. D) shift down and to the right as the real money supply rises.
Suppose that Figure 10.4 shows an industry's market demand, its marginal revenue, and the production costs of a representative firm. If the industry was perfectly competitive, a representative firm's profit would be:
A. $1,250. B. $450. C. $250. D. There is not sufficient information.
If the exports are $1.5 trillion, imports are $2 trillion, short-term investment to and from the U.S. exactly balances, and taxes and private payments to and from the U.S. also exactly balance, the current account balance is a
A. deficit of $.5 trillion. B. surplus of $3.5 trillion. C. surplus of $.5 trillion. D. deficit of $3.5 trillion.
An asset is liquid if
A) it earns interest. B) it is backed by a government guarantee. C) it can be exchanged for other items of value without high transaction costs. D) All of the above are correct.