In Figure 2.1, Box 3 would be labeled
A. S for supply.
B. D for demand.
C. P for price.
D. P* for equilibrium price.
Answer: D
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A decrease in demand will have what effect on equilibrium price and quantity?
A. Price will increase; quantity will decrease. B. Price will decrease; quantity will increase. C. Both price and quantity will increase. D. Both price and quantity will decrease.
If the expected gains on stocks rise, while the expected returns on bonds do not change, then
A) the demand curve for bonds will shift to the right. B) the supply curve for loanable funds will shift to the right. C) the equilibrium interest rate will fall. D) the equilibrium interest rate will rise.
When it comes to productivity, some economists argue that
A) unions have caused a decrease in productivity by excessive staffing and makework requirements. B) through the use of featherbedding unions have been responsible for productivity increases. C) the passage of the Taft-Hartley Act has led to a significant decrease in productivity. D) the union's insistence on profitability laborsaving devices has led to an increase in productivity.
If actions by the President and Congress reduce the federal government budget deficit, then interest rates will _____, the U.S. dollar will _____, and the foreign trade deficit will _____
a. increase; appreciate; increase b. increase; depreciate; increase c. decrease; appreciate; decrease d. decrease; depreciate; increase e. decrease; depreciate; decrease