If an economy has aggregate output of $20 trillion, then aggregate income is
A) $10 trillion.
B) $20 trillion.
C) $30 trillion.
D) $40 trillion.
B
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Suppose Mary is willing to pay up to $15,000 for a used Ford pick-up truck. If she buys one for $12,000, her ________ would be ________.
A. economic surplus; $12,000 B. cost; $15,000 C. benefit; $12,000 D. economic surplus; $3,000
When the Federal Reserve wants to slow inflation, it
A) lowers the federal funds rate. B) increases taxes on interest income. C) raises the federal funds rate target. D) increases aggregate income, output, and employment. E) cuts the federal funds rate target aggressively to almost zero.
Suppose that Bill budgets exactly $50 each month for fresh shrimp, regardless of whether shrimp is priced at $10 per pound, or is on sale for $4 per pound. Based on this information, Bill's price elasticity of demand is:
a. 0. b. Cannot be determined. c. 1. d. infinite.
Risk-free investments have rates of return:
A. that exhibit a large spread of potential payoffs. B. with a standard deviation equal to zero. C. that are uncertain, but have a certain time horizon. D. equal to zero.