If aggregate demand shifts inward over a long period of time, with aggregate supply held constant, the economy should experience
A. unemployment.
B. budget surpluses.
C. stagflation.
D. inflation.
Answer: A
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The above figure shows your budget line and indifference curves. What quantities of gasoline and movie rentals would you choose?
A) 25 gallons of gasoline and 15 movie rentals B) 10 gasoline and 10 movie rentals C) 20 gallons of gasoline and 5 movie rentals D) 15 gallons of gasoline and 8 movie rentals
According to the above table, the equilibrium price of DVDs is
A) $16. B) $14. C) $12. D) $10.
If a country wants maximum flexibility to pursue its domestic macroeconomic goals, it:
A. should use the gold standard. B. does not matter what type of exchange rate system it uses. C. should use a fixed exchange rate. D. should use a flexible exchange rate.
Suppose Jackie is considering purchasing an asset that will have a future value of $650 in 4 years. The interest rate is 8% and the price of the asset is $500. Should Jackie buy the asset? Why or why not?
What will be an ideal response?