In Figure 6.1, which area represents a trough? 
A. A
B. B
C. C
D. D
Answer: C
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If the government began providing free textbooks to college students who would otherwise have bought their books from the private sector, the government's action would result in
A) a Ricardian dilemma. B) a direct expenditure offset. C) an increase in real Gross Domestic Product (GDP). D) a reduction of the government deficit.
With respect to labor supply, the income effect leads a person to want to work more in order to raise his or her income
Indicate whether the statement is true or false
Explain through the component parts of aggregate demand why the aggregate demand curve slopes down with respect to the inflation rate. Be sure to discuss two channels through which changes in inflation rates affect demand
What will be an ideal response?
One way to make consumers take a positive externality into account in their demand decision is to:
A. place a tax on the item. B. tax the producers of the item. C. subsidize the purchase of the item. D. None of these statements is true.