Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the short run would be:
A. P3 and Y1.
B. P2 and Y1.
C. P2 and Y3.
D. P1 and Y2.
Answer: B
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A typical behavior that violates the assumption of rational behavior is:
A. saying you want to lose weight, but ordering dessert. B. being willing to pay more for something if you use a credit card than if you use cash. C. stubbornly watching to the end of a movie you've decided you're not enjoying at all. D. All of these demonstrate irrational behavior.
How would the imposition of tariffs on imported leather boots be likely to affect domestic boot manufacturers?
a. Foreign competition would increase. b. Prices for domestic boots will be lower. c. Boot prices will rise and sales increase. d. Imports will outsell domestic boots.
National income is a measure of
A. How well the economy is doing on a gross basis. B. The income earned by the factors of production in producing GDP. C. The country's future productive capacity. D. The income received by the factors of production plus depreciation.
The minimum wage laws seek to
A. assure that all workers are paid the same wage rate. B. help teenagers find work. C. assure a minimum standard of payment for work. D. penalize employers that are not complying with labor laws.