The effect of a change in price on the quantity bought while keeping the consumer on the same indifference curve, is called the
A) price effect.
B) income effect.
C) substitution effect.
D) real effect.
C
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If cyclical unemployment is 4%, the overall unemployment rate
A. is 4%. B. is more than 4%. C. is 9%. D. is more than 9%.
(Last Word) Passively managed funds produce higher rates of return for investors than actively managed funds because:
A. trading and management costs are higher with actively managed funds. B. passively managed funds invest in riskier assets that have higher rates of return. C. actively managed funds invest in riskier assets that have not reached expected rates of return. D. actively managed funds are taxed, while passively managed funds are not taxable.
Using Figure 1.7, we know the production of 4 units of soda and 2 units of pizza is 
A. impossible because we have the resources but do not have the technology. B. possible, but only if all resources were fully employed. C. impossible because we have the technology but do not have the resources. D. possible, but there would be unemployed resources.
A decrease in aggregate demand in the short run will reduce:
A. Both real output and the price level B. The price level and increase the real domestic output C. The real domestic output and have no effect on the price level D. The price level and have no effect on real domestic output