Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C
B. B; C
C. B; A
D. D; B
Answer: D
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When the domestic currency is initially overvalued in a fixed exchange rate regime, the central bank must intervene in the foreign exchange market to ________ the domestic currency, thereby allowing the money supply to ________
A) purchase; decline B) sell; decline C) purchase; increase D) sell; increase
Which of the following statements best describes the relationship between GDP and standard of living?
a. GDP does not understate or overstate the standard of living. b. GDP may understate the standard of living. c. GDP may understate or overstate the standard of living. d. GDP may understate the standard of living.
We could use the information in the table to draw a production possibilities frontier for England and a second production possibilities frontier for France. If we were to do this, measuring cheese along the horizontal axis, then
A. the slope of England's production possibilities frontier would be -4 and the slope of France's production possibilities frontier would be -0.4. B. the slope of England's production possibilities frontier would be 0.25 and the slope of France's production possibilities frontier would be 2.5. C. the slope of England's production possibilities frontier would be -0.25 and the slope of France's production possibilities frontier would be -2.5. D. the slope of England's production possibilities frontier would be 4 and the slope of France's production possibilities frontier would be 0.4.
Which of the following is a public assistance or welfare program as opposed to a social insurance program?
A. Supplemental Security Income (SSI). B. Unemployment compensation. C. Medicare. D. Social Security.