In a command economy, how many people decide what will be produced?
a. a small handful of government officials
b. one overall leader
c. millions of consumers and producers
d. a few thousand corporate managers
a. a small handful of government officials
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Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
When the economy suffers a temporary negative supply shock and the central bank responds by changing the autonomous component of monetary policy to keep inflation at the target inflation rate, then
A) aggregate output drops in the short run. B) output will return to potential output over time. C) aggregate output is stabilized. D) all of the above. E) both A and B.
As a result of the superb economics essay that you wrote during this quarter, you won the Adam Smith prize of $100. The receipt of these funds would be an example of
A) the substitution effect being stronger than the income effect. B) the income effect being stronger than the substitution effect. C) a pure income effect. D) a pure substitution effect.
Because models are used to explain economic behavior
A. models can be either simple or complex so long as it explains economic behavior. B. models must be simple. C. models must be complex. D. the assumptions must be complex while the models themselves are simple.