Which of the following explains why individuals must make choices?
a. competition among firms
b. scarcity of resources
c. inflation
d. changes in the money supply
e. conflict between positive and normative economic statements
B
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When short-term interest rates are expected to fall sharply in the future, the yield curve will
A) slope up. B) be flat. C) be inverted. D) be an inverted U shape.
Use the above table and assume a fixed cost of $1000. At an output of 4, AFC is
A. $200.
B. $250.
C. $500.
D. $1,000.
If aggregate spending in an economy can be written as Y = 15,000 + 0.6Y - 20,000r, and potential output equals 36,000, what real interest rate must the Federal Reserve set to bring the economy to full employment?
A. 4 percent B. 5 percent C. 2 percent D. 3 percent
Which of the following holds true, if goods sell for the same price worldwide when converted to a common currency?
a. A high rate of inflation exists. b. A fixed exchange-rate system exists. c. Purchasing power parity exists. d. The foreign exchange market is in equilibrium. e. Arbitrage opportunities exist.