A recession ________ output in the future and inflation ________ output in the future.
A. may reduce; may reduce
B. will reduce; will reduce
C. may reduce; will increase
D. will reduce; will not affect
Answer: A
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Which of the following is least likely to be considered an input to production?
A) a supervisor's time B) an integrated circuit fabrication plant C) wind D) None of the above.
If the economy is experiencing high rates of inflation due to a new housing bubble, what effects would expansionary monetary policy have on the economy?
A) It would reduce inflation as well as unemployment. B) It would raise inflation as well as unemployment. C) It would reduce inflation but cause unemployment to rise. D) It would raise inflation but would cause unemployment to fall.
Which of the following is not an example of the adverse selection problem?
A. Buyers in a market for used cars must choose from an undesirable selection of used cars. B. An insurance company must choose one price for its coverage for both high-cost and low-cost people. C. Commercial banks would rather use credit rationing than raising interest rates in the presence of excess demand for loans. D. An insured motorist drives more recklessly.
Select the letter of the diagram in Figure 28.1 that best represents the effect of each event on the United States wheat market, ceteris paribus: The federal government decides to no longer purchase wheat from farmers. (See Figure 29.4.)
A. a. B. b. C. c. D. d.