Budget deficits are inflationary when
A. the Federal Reserve contracts the money supply.
B. the economy has lots of slack and the aggregate supply curve is horizontal.
C. the economy is at full employment and the aggregate supply curve is vertical.
D. private citizens buy the bonds to finance the debt.
Answer: C
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For a product with a constant or gently increasing opportunity cost of producing additional units, as more is produced, we expect that
A) demand is price elastic. B) supply is price elastic. C) demand is price inelastic. D) supply is price inelastic. E) demand is unit elastic.
Refer to Table 2-12. Guatemala has a comparative advantage in the production of
A) sailboats. B) canoes. C) both products. D) neither product.
As labor productivity increases, which of the following shifts in the labor market should occur?
A. Supply of labor should shift to the left. B. Demand for labor should shift to the right. C. Demand for labor should shift to the left. D. Supply of labor should shift to the right.
A firm that must determine the price-output combination that maximizes profit because it faces a downward-sloped demand curve
A. has a perfectly inelastic demand curve. B. is a price-taker. C. is a price searcher. D. has a perfectly elastic demand curve.