If the Federal Reserve raises its target inflation rate, the monetary policy reaction function ________ and the aggregate demand curve ________.
A. shifts upward to the left; shifts to the right
B. shifts downward to the right; shifts to the left
C. shifts downward to the right; shifts to the right
D. shifts upward to the left; shifts to the left
Answer: C
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The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B B. recessionary; C C. recessionary; A D. expansionary; A
The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
Jason needs help getting ready for the next test in his economics course and would like to hire Maria, an economics tutor, to help him
Jason is willing to pay $30 for the first hour of tutoring, $25 for the second, $20 for the third, $15 for the fourth, and $10 for the fifth. The equilibrium price for tutoring is $15 per hour. For how many hours of tutoring will Jason hire Maria? Why this amount of hours? What is Jason's consumer surplus, if any, from the tutoring? What is Maria's consumer surplus from the tutoring?
Investment in both physical and human capital enhances economic growth because it:
a. increases consumption during the current period. b. makes it possible for individuals to produce more goods and services per hour worked. c. encourages firms to expand output by employing more low-productivity workers. d. encourages workers to unionize and, thereby, fight for higher wages.