An increase in government regulation will shift
A. aggregate demand to the right.
B. aggregate supply to the right.
C. aggregate demand to the left.
D. aggregate supply to the left.
Answer: D
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The law of increasing relative costs, depicted by the concavity of the production possibilities frontier, is most closely related to the
A. downward slope of the demand curve. B. upward slope of the demand curve. C. downward slope of the supply curve. D. upward slope of the supply curve.
When comparing the annual inflation rate in the United States based on the CPI with the annual inflation rate based on the PCE price index, the data show that the two inflation rates
A) move in opposite directions. B) remained constant over the forty year period after 1979. C) steadily increased over the forty year period after 1979. D) move up and down in similar but not identical ways. E) both fluctuate, but the fluctuations have little relationship to each other.
When demand is ________, a decrease in price ________ total revenue
A) elastic; decreases B) inelastic; decreases C) unit elastic; increases D) elastic; does not change
Which of the following statement is untrue?
A) assets equal liabilities plus net worth B) households and firms are lenders and borrowers in the flow of funds C) government regulation is the major cause of asymmetric information problems D) pension funds and insurance companies are financial intermediaries