Fiscal policy affects
A. Interest rates only, and therefore does not affect the level or mix of output.
B. Both the level and the mix of output.
C. The level of output only.
D. The mix of output only.
Answer: B
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According to the quantity theory of money, if the growth rate of money supply is 6% and the growth rate of real GDP is 9%, then the growth rate of nominal GDP in the economy will be:
A) 9%. B) 6%. C) 3%. D) 15%.
When plotted with the aggregate price level on the vertical axis and output on the horizontal axis, which of the following curves slopes downward?
A) SRAS B) AD C) LRAS D) None of the above
If the dollar appreciates,
a. imports to the United States become more expensive for foreigners b. exports from the United States become more expensive for foreigners c. imports become more expensive for U.S. citizens. d. exports from the United States become cheaper e. the dollar will exchange for fewer units of a foreign currency
A local fast-food restaurant mails out coupons for a free sandwich to every home in the community. The opportunity cost of redeeming the sandwich for someone who was on a diet might be:
A. not eating because you are on a "get fit for the summer" diet plan. B. lost wages due to spending time in a long line instead of eating a Healthy Choice meal in your office. C. eating a "Tough Man's Burger," which is one of your favorite fast food options. D. There was no opportunity cost for the sandwich because it was free.