Assume the market for tennis balls is perfectly competitive. When one tennis ball producer exits the market,
a. the price of tennis balls increases.
b. the price of tennis balls decreases.
c. the price of tennis balls does not change.
d. there is no longer a market for tennis balls.
c
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If the economy is at full employment, anything that causes the level of income to change will cause fluctuations in the __________ that will shift the __________ curve and thus help stabilize economic activity
A) price level; IS B) price level; LM C) interest rate; IS D) interest rate; LM
Unemployment compensation payments:
a. rise during a recession and thus reduce the severity of the recession. b. rise during a recession and thus increase the severity of the recession. c. rise during inflationary episodes and thus reduce the severity of the inflation. d. fall during a recession and thus increase the severity of the recession.
The unique point at which the supply and demand curves intersect is called
a. market harmony. b. coincidence. c. equivalence. d. equilibrium.
A political candidate promises voters more funding for AIDS research and child care and assures them they will not have to sacrifice any other goods or services to obtain the additional programs.
A. This may be possible if the economy has unemployed resources. B. This is possible only in a fully employed economy. C. This is possible if the economy is producing on its production possibilities curve. D. None of the choices are possible.