Suppose nominal aggregate demand falls by 3 percent while nominal wages are fixed
If firms were to lower their prices by 3 percent, this would ________ the drop in real output, with such pricing ________ an assumption that firms are profit-maximizers. A) prevent, in violation of
B) prevent, consistent with
C) worsen, in violation of
D) worsen, consistent with
A
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Suppose the government issues a limited number of pollution permits in order to limit the quantity of pollution. Under this policy, does the demand curve for pollution rights determine the quantity of pollution, or does it determine the price of pollution?
If large budget deficits push government debt as a share of the economy to higher and higher levels, this will eventually lead to
A) higher interest rates on the government's bonds because it will be less risky to loan the government funds. B) higher interest rates on the government's bonds because it will be more risky to loan the government funds. C) lower interest rates on the government's bonds because it will be less risky to loan the government funds. D) lower interest rates on the government's bonds because it will be more risky to loan the government funds.
Using Figure 1.5 above, we know the production of 2 units of soda and 2 units of pizza is 
A. impossible because we have the technology but do not have the resources. B. possible, but there would be unemployed resources. C. impossible because we have the resources but do not have the technology. D. possible, but only if all resources were fully employed.
The Tea Act:
a. raised the price of tea to colonists. b. allowed for more "middlemen" to be involved in the exportation of tea from India to America. c. made tea an "enumerated good" under the Navigation Acts. d. harmed smugglers of Dutch tea.