The transactions demand for money is
a) positively related to aggregate income
b) positively related to interest rate
c) negatively related to the price level
d) all of the above
Answer: a) positively related to aggregate income
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Trade surplus is the excess of exports over ________
A) capital outflows B) factor payments C) transfers D) imports
The effective operation of the U.S. economic system depends upon
A) high profits. B) low profits. C) stable profits. D) the expectation of profits.
Bill Bonecrusher graduates from college with a choice of playing professional football at $2 million a year or coaching for $50,000 a year. He decides to play football, but eight years later he quits football to make movies for $3 million a year. His opportunity cost at graduation was and eight years later was
A) $50,000; $2 million B) $2 million; $2 million C) $2 million; $3 million D) $50,000; $50,000
Suppose Johnson's Rubber Factory belches black smoke into the air over the city of Bellowsville. If the city of Bellowsville attempts to internalize the external costs associated with the production of rubber with a pollution tax, then we expect:
A. at each price, a smaller quantity of rubber will be supplied by Johnson's Rubber Factory. B. at each price, a larger quantity of rubber will be supplied Johnson's Rubber Factory. C. Johnson's Rubber Factory will not change the amount of rubber supplied at each price. D. Johnson's production costs not to change.