If the quantity of real GDP demanded is less than the quantity of real GDP supplied, then
A) the economy must be producing at potential GDP.
B) the price level falls and firms decrease production.
C) the price level falls and firms increase production.
D) the price level rises to restore the macroeconomic equilibrium.
E) aggregate demand changes to restore the equilibrium.
B
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For a restaurant, all the following are fixed costs, except
a. Space rental b. Advertising c. Raw material cost d. All of the above-they are all variable costs
The Fed's purchase of U.S. government securities constitutes a(n):
a. contractionary policy because it lowers the amount of total reserves in the banking system. b. contractionary policy because it lowers the amount of excess reserves in the banking system. c. expansionary policy because it raises the amount of total reserves in the banking system. d. expansionary policy because it lowers the amount of total reserves in the banking system. e. expansionary policy because it raises the amount of required reserves in the banking system.
If the production possibilities curves of two countries have the same slope,
a. neither has a comparative advantage, and there are no gains from trade. b. although there is no comparative advantage, there are potential gains if there are differences in absolute advantage. c. neither has an absolute advantage, and there cannot be gains from trade. d. both have an absolute advantage, and can gain from trade.
Suppose that indifference curve I1 lies to the right of indifference curve I2. We can conclude that
A. all points along indifference curve I1 will correspond to lower utility than points along indifference curve I2. B. some, but not all, points on indifference curve I1 will correspond to lower utility than points along indifference curve I2. C. all points along indifference curve I1 will correspond to higher utility than points along indifference curve I2. D. some, but not all, points on indifference curve I1 will correspond to higher utility than points along indifference curve I2.