Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD3 the result in the short run would be:
A. P1 and Y2.
B. P2 and Y3.
C. P3 and Y1.
D. P2 and Y2.
Answer: B
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When two firms collude to maximize profit the total quantity produced by both firms taken together is determined at the quantity where ________
A) excess capacity is minimized B) industry marginal cost equals industry marginal revenue C) the price equals the industry's marginal cost D) excess capacity is as large as possible zero
Everything else held constant, if the sum of the required reserve ratio and the excess reserve ratio is less than one, an increase in the currency-checkable deposit ratio will mean
A) an increase in currency in circulation and an increase in the money supply. B) an increase in money supply but no change in reserves. C) a decrease in the money supply. D) an increase in currency in circulation but no change in the money supply.
Which of the following statements is true of bond markets?
a. A small firm can easily raise funds by issuing bonds because an investor can get a large percentage of ownership with considerably less amount of money. b. A small firm can easily raise funds by issuing bonds because investors believe that small firms have a higher potential of growth. c. A large and famous firm can easily raise funds by issuing bonds because investors are familiar with the company and are therefore more willing to consider investing in it. d. A large and famous firm can easily raise funds by issuing bonds because only large firms can afford the minimum cost of entering the bond market.
Assume an economy that is producing only one product. Output and price data for a three-year period are as follows. Answer the question on the basis of these data. year units of output price per unit 1 20 4 2 25 4 3 30 6 Refer to the above data. If year 2 is chosen as the base year, in years 1 and 3 the price index values, respectively, are:
a) 4 and 6. b) 6 and 4. c) 120 and 100. d) 100 and 150.