Suppose that the supply of gasoline increases. Price will ________ and consumer surplus will ________.
A. increase; increase
B. increase; decrease
C. decrease; increase
D. decrease; decrease
Answer: C
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We could increase the production of both heart transplants and round-the-world trips if we moved to point T from point
A. P.
B. Q.
C. R.
D. S.
Which of the following individuals would be most negatively affected by anticipated inflation?
A) a student who borrows $10,000 at a nominal interest rate of 5% to finance educational expenses B) a full-time employee at a pizza parlor who makes more than the minimum wage C) a retired railroad engineer who receives a fixed income payment every month D) a union contractor whose pay is adjusted based on changes in the CPI
Banks are able to create money only when
a. interest rates are above 2%. b. the Fed sells U.S. government bonds. c. the reserve ratio is 100%. d. only a fraction of deposits are held in reserve.
In a closed economy, the supply of goods and services must be equal to:
A. consumption. B. consumption + investment. C. consumption + investment + government purchases. D. consumption + investment + government purchases ? taxes.