Figure 14.1 shows three aggregate demand curves. A shift from curve AD1 to curve AD0 could be caused by a(n):
A. decrease in the money supply.
B. decrease in taxes.
C. increase in the price level.
D. increase in government spending.
Answer: A
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What is the leverage implied by the bank balance sheet listed below? ? Assets ? ? Liabilities & Net Worth ? Reserves $280,000 ? Checking Deposits $2,800,000 Loans Outstanding $2,920,000 ? ? ? Total $3,200,000 ? Net Worth ? ? ? ? Stockholders’ Equity $400,000 ? ? ? Total $3,200,000
A. 2-to-1 B. 7-to-1 C. 8-to-1 D. 10-to-1
When a group is discriminated against, its
A) wages fall but its employment does not. B) employment and its wages decrease. C) employment decreases but its wages do not. D) employment and its wages are unaffected.
Which of the following macroeconomic variables does not vary much over the seasons?
A) The nominal money stock B) The unemployment rate C) The real wage D) Average labor productivity
Use the following statements to answer this question: I. The equal marginal principle may be used to characterize the maximum utility consumption decision even if the diminishing MRS assumption does not hold. II
The equal marginal principle implies that the MRS at the optimal consumption bundle is always equal to the price ratio. A) I and II are true. B) I is true and II is false. C) II is true and I is false. D) I and II are false.