Consider a market that is in equilibrium. If it experiences a decrease in supply, what will happen? The supply curve will shift to the:
A. right and the equilibrium price and quantity will fall.
B. left and the equilibrium price and quantity will fall.
C. left and the equilibrium price will increase and the equilibrium quantity will decrease.
D. left and the equilibrium price and quantity will rise.
Answer: C
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In calculating GDP, economists
A) measure total expenditure as the only true measure. B) can measure either total expenditure or total income. C) measure total income as the only true measure. D) measure total income minus total expenditure. E) measure total income plus total expenditure.
Monetarists contend that an expansionary monetary policy will lead to a rise in the interest rate because __________ and the __________ effect will raise interest rates by more than the initial __________ effect lowers it
A) inflationary expectations; income; liquidity B) inflationary expectations; liquidity; income C) deflationary expectations; income; liquidity D) deflationary expectations; liquidity; income
There would be no reason for students to study the concept of opportunity costs if:
A.) The market mechanism functioned to allocate resources. B.) The government allocated resources. C.) The production possibilities curve bowed outward. D.) Resources were no longer scarce.
One measure of “ability to pay” the national debt is the debt to
A. GDP ratio. B. tax ratio. C. spending ratio. D. investment ratio.