Refer to Figure 5-16. What is the optimal quantity of street lights to install?

Why is it likely that the United States has an absolute advantage in goods and yet it still ends up importing them from other countries?

What will be an ideal response?

If the political leaders of a country want to promote economic growth, which of the following policy alternatives would be most effective?

a. imposition of price controls on agricultural products in an effort to keep food cheap b. a public-sector investment program financed by highly progressive taxation c. low taxes, a monetary policy consistent with long-run price stability, and the abolition of price controls and trade restrictions d. expansionary monetary policy designed to keep interest rates low

An increase in long-run aggregate supply can be expected to _________ the price level and _________ the natural rate of unemployment.

Fill in the blank(s) with the appropriate word(s).

The smaller the marginal propensity to consume

A. the smaller the marginal propensity to save is. B. the large the multiplier is. C. the smaller the multiplier is. D. the smaller autonomous consumption is.