Which of the following ideas is associated with mainstream economics?
A. Monetary policy rules are desirable.
B. Capitalist economies tend to be stable.
C. Crowding-out of investment makes fiscal policy ineffective.
D. Fiscal policy is a useful stabilization tool.
Answer: D
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Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
The figure above shows supply curves for soft drinks. Suppose the economy is at point a. A decrease in the price of sugar used to make soft drinks is shown as a movement from point a to a point such as
A) none of the points that are illustrated. B) point b. C) point c. D) point d.
International trade between countries typically produces a winner and a loser. Generally, it is the economically more advanced country that gains at the expense of the less developed nation
a. True b. False
Suppose your community is considering using public money to build a new sports stadium for the team that is already in the community and unlikely to ever leave. Suppose you are watching a news broadcast in which the supporters are saying that it will enhance economic activity because of the increase in restaurant activity that will occur around the new stadium. Now suppose you hear that an independent economist is going to appear during the next segment. It is likely she will say
A. there will be no new jobs created. B. there will be no new jobs created in net because there will be about the same number of restaurant jobs lost near the old stadium as gained near the new one. C. the jobs created in the area will make it worth the investment. D. it may be a short-term cost, but in the long term, it will be worthwhile.