The transactions demand for money
A. varies directly with nominal Gross Domestic Product (GDP).
B. varies inversely with nominal Gross Domestic Product (GDP).
C. has no relationship with nominal Gross Domestic Product (GDP).
D. sometimes directly and sometimes inversely with nominal Gross Domestic Product (GDP).
Answer: A
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When Feeding America changed its food allocation system to one that resembled a market, each food program was given a number of "shares" that they could use in bidding against other food programs for the types of food that best met the needs of the
people using their programs. Using these "shares" helped answer which of the following fundamental economic questions? A) What goods and services will be produced? B) How will the goods and services be produced? C) Who will receive the goods and services produced? D) When will the goods and services be produced?
Wichita is building a convention center and financing it with revenues raised from a city hotel tax. Local politicians assert that the convention center is essentially free for Wichita residents because out-of-town visitors are paying for it
Someone who is practicing the economic way of thinking would disagree because A) they believe that Wichita does not need a new convention center. B) there are other projects that could be undertaken with the tax funds. C) the convention center may not pass a marginal cost-benefit test. D) the hotel tax may lead to a decline in visits to Wichita. E) the hotel tax may reduce commercial property values in the area.
Can it be efficient for one trader to consume all units of the goods while the other trader consumes nothing? In other words, does this point lie on the contract curve?
What will be an ideal response?
Assume that the central bank increases the reserve requirement. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real GDP and net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. There is not enough information to determine what happens to these two macroeconomic variables. b. Real GDP falls, and net nonreserve-related international borrowing/lending becomes more positive (or less negative). c. Real GDP rises, and net nonreserve-related international borrowing/lending becomes more positive (or less negative). d. Real GDP rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive). e. Real GDP falls, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).