A movement along the consumption function is the result of changes in
a) the real interest rate
b) disposable income
c) expected future income
d) the price level
b) disposable income
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In the long-run ISLM model and with everything else held constant, the long-run effect of an expansionary monetary policy is to
A) increase real output and the interest rate. B) not change either real output or the interest rate. C) increase real output and leave the interest rate unchanged. D) increase the interest rate and leave real output unchanged.
According to the theory of comparative advantage; a good should be produced in that nation where
A. the production possibilities line lies further to the right than the trading possibilities line. B. its cost is least in terms of alternative goods that might otherwise be produced. C. its absolute cost in terms of real resources used is least. D. its absolute money cost of production is least.
A cartoon in the text shows two people watching television. On the screen are the words "Economic growth indicators are up, led by car repairs, divorce costs, open-heart surgeries, and toxic waste cleanups." The cartoon illustrates the
A) Difficulty in measuring social welfare. B) Difference between GDP and national income. C) Problem of measuring the difference in wealth between the United States and other nations. D) Difference between GDP and NDP.
Figure 3-9
In , if D and S represent the demand and supply for gasoline, what is the equilibrium price and quantity?
a.
price, $1; quantity, 20
b.
price, $2; quantity, 30
c.
price, $3; quantity, 40
d.
price, $4; quantity, 50