If prices of both horizontal and vertical goods decrease by 50%,
A) budget constraint will be unchanged.
B) slope of the budget constraint will increase.
C) slope of the budget constraint will decrease.
D) budget constraint will shift outward in a parallel fashion.
D
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What policies can a government undertake to achieve faster economic growth?
What will be an ideal response?
The equation of exchange states:
a. MV = PQ. b. MP = VQ. c. MP = V/Q. d. V = M/PQ.
Which of the following policy actions by the Fed would cause the money supply to decrease?
a. An open-market purchase. b. A decrease in required reserve ratios. c. A decrease in the discount rate. d. None of these.
James has a comparative advantage in the production of corn, while Harry has a comparative advantage in the production of bread. If James and Harry decide to trade with each other, _____
a. both Harry and James will enjoy gains from trade b. only Harry will enjoy gains from trade c. only Harry will suffer losses from trade d. only James will suffer loses from trade e. neither of them will gain from trade