If all the world's resources were to magically increase one hundredfold, then:
A. scarcity would disappear.
B. trade-offs would become unnecessary.
C. economics would no longer be relevant.
D. people would still have to make trade-offs.
Answer: D
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Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
If the economy is producing at potential GDP,
A) the Phillips curve must be positively sloped. B) unemployment is at its natural rate. C) inflation in the economy is at its natural rate. D) the short-run aggregate supply curve must be vertical.
Suppose that the cost of a loaf of bread in Zanadoo is 20 shillings, and this represents a full day's wages for the typical factory worker. The 20 shillings represents a ____ value while the loaf of bread costing a full day's wage represents a ____ value.
a) real; real b) nominal; nominal c) real; nominal d) nominal; real
For this question, assume that the economy is initially operating at the natural level of output. A reduction in taxes will cause
A) an increase in the real wage in the medium run. B) a reduction in the real wage in the medium run. C) no change in the nominal wage in the medium run. D) ambiguous effects on the real wage in the medium run. E) none of the above