Policy makers should manage aggregate demand so that it grows in line with the economy’s capacity to produce. This task is the realm of
A. growth policy.
B. stabilization policy.
C. labor policy.
D. inflation policy.
Answer: B
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Money performs its job as a standard of value very well
A. in the short run. B. in the long run. C. in both the short and long run. D. in neither the short run nor the long run.
Which phase of the business cycle would be most closely associated with an economic contraction?
A. Peak B. Recession C. Trough D. Recovery
When the exchange rate falls, in the foreign exchange market the
A) quantity demanded of the currency increases. B) demand for the currency increases. C) quantity demanded of the currency decreases. D) demand for the currency decreases.
Refer to Table 3-1. The table above shows the demand schedules for Kona coffee of two individuals (Luke and Ravi) and the rest of the market. At a price of $4, the quantity demanded in the market would be
A) 40 lbs. B) 70 lbs. C) 110 lbs. D) 150 lbs.