Refer to the diagrams. The numbers in parentheses after the AD 1 , AD 2 , and AD 3 labels indicate the levels of investment spending associated with each curve. All figures are in billions. Which of the following would shift the money supply curve from MS 1 to MS 3 ?
A. An increase in the discount rate.
B. Purchases of U.S. securities by the Fed in the open market.
C. Sales of U.S. securities by the Fed in the open market.
D. An increase in the reserve ratio.
B. Purchases of U.S. securities by the Fed in the open market.
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If the prices of both goods and income increase by the same percentage, what will happen to the budget line?
A) The budget line rotates inward from the intercept on the axis of the good that did not change in price. B) The budget line rotates outward from the intercept on the axis of the good that did not change in price. C) The budget line shifts outward without a change in slope. D) Nothing.
If the exchange rate of yen for dollars increases from 100 yen = $1 to 110 yen = $1, then:
a. Japanese-produced goods would become more expensive. b. the dollar has depreciated. c. the yen has appreciated. d. U.S.-produced goods would become more expensive. e. U.S. exports would increase.
The firm maximizes economic profit by finding the rate of output at which total revenue ________ total cost ________
a. equals; all else constant b. plus; equals c. minus; equals zero d. exceeds; by the greatest amount.
One of the most controversial features of the Maastricht Treaty is
A) the lack of ability of individual countries to set their own monetary policies. B) increased control of health and safety measures by the European Commission. C) the free movement of labor throughout Europe. D) the elimination of passport controls in parts of Europe.