Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The economy is currently at Point A. The opportunity cost of moving from Point A to Point B is the
A. 30 LCD televisions that must be forgone to produce 60 additional OLED televisions.
B. 90 LCD televisions that must be forgone to produce 20 additional OLED televisions.
C. 30 LCD televisions that must be forgone to produce 20 additional OLED televisions.
D. 120 LCD televisions that must be forgone to produce 40 additional OLED televisions.
Answer: C
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Assume that the reserve ratio is 20% and banks in the system are loaning out all their excess reserve. If people collectively cash out $10 billion from their checking accounts, then the lending ability of the banking system will be
A. increased by $10 billion. B. decreased by $40 billion. C. decreased by $50 billion. D. decreased by $10 billion.
In the Keynesian model of income determination, consumer expenditure includes spending by
A) consumers on personal computers. B) businesses on personal computers. C) governments on personal computers. D) foreigners on domestic personal computers.
When the actual unemployment rate equals the natural unemployment rate, inflation is
A) zero. B) constant. C) rising. D) falling.
Suppose the government taxes 30 percent of the first $70,000 and 50 percent of all income above $70,000 . For a person earning $100,000 . the marginal tax rate is
a. 30 percent, and the average tax rate is 50 percent. b. 30 percent, and the average tax rate is 36 percent. c. 50 percent, and the average tax rate is 40 percent. d. 50 percent, and the average tax rate is 36 percent.