Suppose there is a simultaneous central bank purchase of bonds and increase in taxes. We know with certainty that this combination of policies must cause
A) an increase in the interest rate (i).
B) a reduction in i.
C) an increase in output (Y).
D) a reduction in Y.
B
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Table 7-4 ? 6 346 490 600 692 775 846 ? 5 316 448 548 632 705 775 ? 4 282 400 490 564 632 692 CAPITAL 3 245 346 423 490 548 600 ? 2 200 282 346 400 448 490 ? 1 141 200 245 282 316 346 ? 0 1 2 3 4 5 6 ? LABOR ? ? ? ? ? Table 7-4 shows a production relationship. Assuming the capital stock is fixed at three units and the cost per day of labor is $65, what is the most labor that it is efficient to hire if the product price is $1 per unit?
A. 2 B. 3 C. 4 D. 5
If a U.S. shirt maker purchases cotton from Egypt, U.S. net exports
a. increase, and U.S. net capital outflow increases. b. increase, and U.S. net capital outflow decreases. c. decrease, and U.S. net capital outflow increases. d. decrease, and U.S. net capital outflow decreases.
Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss
As shown in Exhibit 3A-2, if the market is in equilibrium, then total surplus is represented by
A. BGHF B. CBEFDA C. CBEA D. AEFD
An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease