If the economy in the graph shown is currently at point B, and the government enacts contractionary fiscal policy, in the short run the economy will most likely move to point:
A. A
B. It is likely to be unaffected and stay at point B
C. C
D. D
Answer: A
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A few years ago, you bought a bond with no expiration and a fixed annual interest payment of $1,000 at a price of $10,000. If the interest rate in the economy is now 12.5% a year and you want to sell the bond, the maximum price that you can get for it is
A. $7,500. B. $12,500. C. $9,750. D. $8,000.
The social cost of a good or service includes the producer's private cost and all the external costs
Indicate whether the statement is true or false
The quantity demanded of a good reflects
A) the number of units of a good people actually purchase. B) the number of units of a good suppliers will provide. C) the number of units of a good people plan to purchase at different prices. D) the number of units of a good people need to purchase.
Mutual funds are primarily held by
A) financial institutions. B) households. C) nonfinancial businesses. D) the Social Security trust fund.