Which of the following events would most likely reduce aggregate demand?
A. A reduction in the amount of existing capital stock
B. A reduction in business and personal tax rates
C. An increase in expected returns on investment
D. An increase in real interest rates
D. An increase in real interest rates
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Refer to the production possibilities frontier in the figure above. More of good X must be given up per unit of good Y gained when moving from point b to point a than when moving from point c to point b. This fact
A) illustrates decreasing opportunity cost. B) illustrates increasing opportunity cost. C) indicates that good X is more capital intensive than good Y. D) indicates that good Y is more capital intensive than good X.
Suppose total factor productivity increases. Which of the following is incorrect?
A) Households are better off. B) Consumption goes up. C) The real wage goes down. D) Output goes up.
Economists make assumptions to
a. provide issues for political discussion. b. make a complex world easier to understand. c. make it easier to teach economic concepts and analysis. d. create policy alternatives that are incomplete or subject to criticism.
When economists are trying to explain the world, they are
a. scientists. b. policy advisers. c. in the realm of microeconomics rather than macroeconomics. d. in the realm of normative economics rather than positive economics.