If a central bank decreases the money supply in response to an adverse supply shock, then which of the following quantities moves closer to its pre-shock value as a result?
a. both the price level and output
b. the price level but not output
c. output but not the price level
d. neither output nor the price level
b
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A tax that is imposed on an imported good is called a
A) tariff. B) quota. C) government license. D) patent.
Answer the next question on the basis of the data given for two regions, East and West, of a hypothetical world. The nations have the production possibilities for units of food and clothing given below.East Production PossibilitiesWest Production Possibilities ABCD ABCDFood241680Food4530150Clothing04812Clothing051015Which of the following statements about the two nations is correct based on the principle of comparative advantage?
A. West has a comparative advantage in the production of clothing. B. West should specialize in the production of clothing. C. East should specialize in the production of food. D. West has a comparative advantage in the production of food.
From 2004 to 2006 the Fed raised the federal funds rate gradually in a series of steps. The Fed's purpose was to raise the prime interest rate so that:
A. high inflation rates would fall. B. aggregate demand would continue to grow consistently and with low inflation. C. aggregate supply would grow, increasing output and lowering the price level. D. banks would reduce lending that was building up unmanageable consumer debt.
Illegal immigrants from Mexico who work continuously in the U.S. have the following characteristics, except:
A. They are mostly working in farms B. They make up a majority of the illegal immigrants in the U.S. C. On average, they have higher educational levels than the Mexicans who don't migrate D. They do not frequently move back and forth across the border