To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change.
B. increase.
C. decrease.
D. either increase or decrease depending on the relative shifts of AD and AS.
Answer: C
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The local Allied Moving Company begins this year with capital equal to $250,000. During the year the firm depreciates $150,000 worth of its capital and ends the year with capital equal to $250,000
Which statement correctly summarizes Allied Moving Company's investment? A) Allied Moving Company made gross investment of $250,000 during the year. B) Allied Moving Company made no net investment during the year. C) Allied Moving Company made no gross investment during the year. D) Allied Moving Company made no capital investment during the year. E) Allied Moving Company made net investment of $150,000 during the year.
Marginal utility can be thought of as
A) the incremental change in a person's total satisfaction level from the consumption of a good. B) the total change in satisfaction from buying a good. C) the additional cost of that next good purchased. D) the opportunity cost of buying the next good.
What is the benefit of understanding the income and the substitution effects?
A) The income effect might run in the opposite direction of the substitution effect. B) The income effect always runs in the opposite direction of the substitution effect. C) The income and substitution effects just offset each other, which explains a lot. D) The income and substitution effects are proportional to each other.
Refer to the information provided in Figure 10.4 below to answer the question(s) that follow. 
Figure 10.4 Refer to Figure 10.4. Firms will
A. hire 175 units of labor at a market wage of $15. B. hire 100 workers at a wage of $25. C. hire 100 units of labor at a market wage of $15 and have a surplus of $5 per unit of labor. D. indeterminate from the given information