The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending.
B. recessionary gaps.
C. expansionary gaps.
D. unemployment.
Answer: B
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The quantity theory of money is the idea that in the long run
A) the quantity of money is determined by banks. B) the quantity of money serves as a good indicator of how well money functions as a store of value. C) the quantity of money determines real GDP. D) an increase in the growth rate of the quantity of money leads to an equal increase in the inflation rate.
In the figure above, the marginal rate of substitution (MRS) at point A is
A) greater than the MRS at any other point on the indifference curve. B) equals the MRS at all other points on the indifference curve. C) less than the MRS at any other point on the indifference curve. D) equal to the slope of the budget line.
Figure 3-14
Refer to . The gasoline market was initially in equilibrium at point e. Other things constant, an increase in the popularity and use of Sport Utility Vehicles (SUVs) that consume more gasoline per mile driven than most other types of cars would likely move the equilibrium in this market toward point
a.
r.
b.
s.
c.
t.
d.
u.
Refer to the following nonlinear model which relates W to P, Q, and R:W = aPbQcRdThe computer output form the regression analysis is: 
Based on the info above, the value of R2 tells us that
A. 90.23% of the total variation in ln W is explained by the regression equation. B. 0.9023% of the total variation in P, W, and R is explained by the regression equation. C. 0.9023% of the total variation in ln W is explained by the regression equation. D. 0.9023% of the total variation in ln P, ln Q, and ln R is explained by the regression equation.