According to Figure 4.1, which of the following statements is true?
A. Bundle A would be preferred to bundle C.
B. Bundle A would be preferred to bundle B.
C. Bundle C would be preferred to bundle D.
D. Bundle B would be preferred to bundle A.
C. Bundle C would be preferred to bundle D.
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The number of firms in a perfectly competitive market:
A. is fixed in the short run. B. is fixed in the long run. C. varies in the short run. D. is the same at all possible long-run equilibria.
If sellers expect the price of a good to rise in the future, what are they likely to do?
(A) Put more goods on the market immediately. (B) Store goods now to sell more in the future. (C) Raise their prices now. (D) Set prices according to the law of demand.
Each of the following would decrease the demand for U.S. dollars, shifting the demand curve for dollars to the left, EXCEPT:
A. a decrease in real GDP abroad. B. a depreciation of foreign currencies relative to the U.S. dollar. C. a decreased preference for U.S.-made goods. D. a decrease in the real interest rate on U.S. assets.
Which of the following will occur when an economy is faced with a liquidity trap situation?
A) A reduction in the price level will cause a rightward shift in the aggregate demand curve. B) A reduction in the price level will cause a leftward shift in the aggregate demand curve. C) The aggregate demand curve is now vertical. D) The aggregate demand curve is now upward sloping.