Refer to the information provided in Figure 1.7 below to answer the question(s) that follow.
Figure 1.7Refer to Figure 1.7. The slope of the line between Points D and B is
A. 1.5.
B. 0.67.
C. -0.67.
D. -1.5.
Answer: B
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According to the Keynesian view, as interest rates fall
a. people will hold more money b. people will hold less money c. people will increase interest-yielding asset holdings d. the quantity demanded of investment goods will fall e. the economy's aggregate demand will contract
Policies such as rent control and trade barriers persist
a. because economists are about evenly divided as to the merits of those policies. b. because almost all economists agree that those policies have no discernible economic effects. c. because almost all economists agree that those policies are desirable. d. despite the fact that almost all economists agree that those policies are undesirable.
Suppose that a new drug has been approved to treat a life-threatening disease. The demand for that drug is shown on the accompanying graph. Prior to approval of this drug, the only treatment for this condition was any one of several non-prescription, or over-the-counter, pain relievers. The demand for one brand of the several non-prescription pain relievers is also shown on the graph.
Demand for the new drug is ________ while demand for one brand of the over-the-counter pain relievers is ________.
A. the vertical line at 100; the line labeled A B. the line labeled A; the line labeled B C. the horizontal line at $60; the line labeled B D. the line labeled B; the line labeled A
Suppose a Starbucks tall latte costs $4.00 in the United States and 3.20 euros in the Euro area. Also, suppose a McDonald's Big Mac costs $4.40 in the United States and 5.50 euros in Euro area. If the nominal exchange rate is .80 euros per dollar, the prices of which goods have prices that are consistent with purchasing-power parity?
a. both the tall latte and the Big Mac b. the tall latte but not the Big Mac c. the Big Mac but not the tall latte d. neither the tall latte nor the Big Mac