Assume Gloria is initially in equilibrium and that X and Y are normal goods for her. Then the price of X falls. For Gloria to move to a new equilibrium point her consumption of
A. X must decrease.
B. X must remain constant, but her consumption of Y must decrease.
C. X must increase.
D. both X and Y must decrease.
Answer: C
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Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
Refer to Figure 7.1. Suppose the city passes an ordinance banning loud music, and this directly impacts Angus's legal ability to play his bagpipes. The benevolent social planner would choose an outcome where Angus ________ and Dudley ________
A) plays the bagpipes; does nothing B) plays the bagpipes; calls the police C) mops floors; does nothing D) mops floors; calls the police
A country's balance of payments accounts include all of the following EXCEPT the
A) military account. B) current account. C) capital and financial account. D) official settlements account.
Refer to Table 9-11. All of the following are terms of trade that could possibly benefit both countries except
A) 1 hat : 1 clock B) 1 hat : 3/5 of a clock C) 1 hat : 1.5 clocks D) 1 hat : 2.5 clocks