The aggregate supply and aggregate demand model is used to explain the:
A. overall health of the economy.
B. way that unemployment may affect output, but not how price level does.
C. overall effect of large markets within the economy.
D. interaction of all sellers and all buyers within a particular market.
Answer: A
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The recession of 2007-2009 would most likely be represented in a production possibilities frontier graph by
A) a point on the frontier. B) a point inside the frontier. C) a point outside the frontier. D) an intercept on either the vertical or the horizontal axis.
For certain intangibles that cannot be measured, it is best to
A. guess. B. exclude them from cost benefit analysis, and then calculate how large they must be to reverse the decision. C. reevaluate using the Hicks-Kaldor criterion. D. leave it to the private sector to decide on value.
List the five steps for calculating the consumer price index and inflation rate
The Exchange Rate Mechanism (ERM) was:
A) an attempt to bring all countries under a fixed exchange rate system. B) a fixed exchange rate system in Europe, with the Deutsche Mark as the anchor currency. C) a fixed exchange rate system in Europe, with the British pound as the anchor currency D) a fixed exchange rate system in use in the 1960s.