Equilibrium GDP on the demand side occurs when total spending
A. equals total production, and inventories are zero.
B. equals total production, and firms are unable to adjust inventories.
C. exceeds total production, and inventories are rising.
D. equals total production, and inventories remain at desired levels.
E. is less than total production, and inventories are falling.
Answer: D
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Increases in the productivity of labor result partly from
A. increases in the quantity of labor. B. improvements in technology. C. the law of diminishing returns. D. reductions in wage rates.
The above figures show the market for gasoline. Which figure(s) shows the effect of a decision by the OPEC countries in the Middle East to export less oil to the rest of the world?
A) Figure B B) Figure C C) Figure D D) Figures B and C
The demand for loanable funds slopes
A) downward because NPV falls as interest rates fall. B) downward because NPV falls as interest rates rise. C) downward because NPV falls as money enters the economy. D) upward because at higher interest rates people are more willing to save. E) upward because at higher interest rates the stock market is a less attractive investment.
According to the law of increasing opportunity costs,
A. The more one is willing to pay for resources; the smaller will be the possible level of production. B. In order to produce additional units of a particular good, it is necessary for society to sacrifice increasingly larger amounts of alternative goods. C. Increasing the production of a particular good will cause the price of the good to remain constant. D. None of the choices are correct.