If the opportunity cost of producing a good domestically exceeds the opportunity cost of purchasing it on the world market, a country can gain by
A. decreasing production and increasing imports.
B. increasing production and decreasing imports.
C. decreasing production and increasing exports.
D. increasing production and decreasing exports.
Answer: A
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Money is
A) anything backed by gold. B) any durable good. C) whatever people use as a general medium of exchange. D) something intentionally created by farsighted people.
An increase in AD will trigger less inflation under which of the following conditions?
A. AD is relatively steep. B. AD is relatively flat. C. AS is relatively steep. D. AS is relatively flat.
All of the macroeconometric models currently in use
A) originate in the United States. B) incorporate rational expectations into their predictions. C) originate with government or international agencies. D) originate with commercial firms who sell their forecasts to other firms and governments. E) none of the above
Aggregate-demand aggregate supply model with AD shifted to the right. In the figure above suppose the economy is initially at point A. The movement of the economy to point B as shown in the graph illustrates the effect of which of the following policy actions by the Federal Reserve?
a. a decrease in income taxes b. an increase in the required reserve ratio c. an open market purchase of Treasury bills d. an open market sale of Treasury bills