Because the value of the euro is determined by factors that affect the entire euro zone, during the recession of 2007-2009, individual countries using the euro
A) were able to use expansionary monetary policy to lessen the impact of the recession.
B) were unable to have their exchange rates depreciate.
C) were more insulated from unemployment increases than most countries.
D) experienced a greater increase in exports than did most countries.
B
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Of the alternative measures of the price level, _________ overcomes the bias of the CPI and is a better measure of the cost of living because it _________
A. GDP price index; uses a current basket B. PCE price index; uses a current basket of all consumption goods C. PCE price index excluding food and energy; is less volatile D. GDP price index; includes all goods and services bought by Americans
The equation for the balanced budget multiplier can be written as
a. (1/1 – b) – (b/1 – b). b. (1/1 + b) + (? b/1 – b). c. (1/1 – b) + (b/1 + b). d. (1/1 + b) – (b/1 + b).
Household production is more likely to occur when
a. it requires many specialized resources b. technology makes it more costly than market production c. tax avoidance is desirable d. less control over the final product is desirable e. the opportunity cost of household production is high
Consider a competitive industry and a price-taking firm that produces in that industry. The market demand and supply functions are estimated to be: Demand: Qd = 10,000 ? 10,000P + 1.0MSupply: Qs = 80,000 + 10,000P ? 4,000PIwhere Q is quantity, P is the price of the product, M is income, and PI is the input price. The manager of the perfectly competitive firm uses time-series data to obtain the following forecasted values of M and PI for 2015:
= $50,000 and 
I = $20The manager also estimates the average variable cost function to beAVC = 3.0 ?
0.0027Q + 0.0000009Q2Total fixed costs will be $2,000 in 2015. The manager ________ produce since ________. A. should not; $2 < $2.15 B. should not; $0.50 < $1.00 C. should; $2.75 > $0.75 D. should; $3 > $0.975