The term "quantity demanded":
A. means the same thing as demand.
B. refers to the amount of a product that will be purchased at some specific price.
C. refers to the entire series of prices and quantities that comprise the demand schedule.
D. refers to a situation in which the income and substitution effects do not apply.
Answer: B
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
Suppose Bob leaves his $50,000-a-year job as a financial advisor to P.E.T.S. and starts his own business selling pet-care products. In the first year, his accounting profit is $70,000. Based on this level of success, Bob should:
a. return to his old job because his economic profit is negative. b. return to his old job because his economic profit is smaller than his accounting profit. c. return to his old job because his economic profit is less than his old salary. d. stay with his new firm because his economic profit is positive. e. stay with his new firm because accounting profit is positive.
Inflation reduces the multiplier effect by reducing consumers' wealth and purchasing power
a. True b. False Indicate whether the statement is true or false
Relative purchasing power parity is:
a. More accurate the shorter the time period. b. Worse than absolute purchasing power parity at predicting changes in exchange rates. c. Highly inaccurate because of the conflict between monetary policy and fiscal policy. d. More accurate the longer the period of time. e. All the above.