Referring to Table 4.2, Box Q should be filled with 
A. $12.50.
B. $7.50.
C. $2.
D. $00.
Answer: B
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According to the real-business-cycle perspective
A) the economy cannot be stabilized by policy activism. B) the Phillips curve is very important. C) passive policy making is important. D) active policy making is important.
Charles Murray points out that
A. despite substantial increases in the money that the federal government spent on antipoverty programs between 1968 and 1980, the poverty rate remained exactly the same. B. although federal spending on antipoverty programs fell substantially between 1968 and 1980, the poverty rate remained exactly the same. C. the only way to substantially reduce the welfare rolls is to enroll all the poor in job training programs that lead to well-paying jobs. D. despite the rising number of poor people in recent years, the federal antipoverty programs have been successful.
An oligopolist decides to lower its price to capture a greater market share. This sets off a price war with its rivals, and the price moves from P 1 to P 2 and so forth. What is the ultimate outcome if this price war continues?
a. The final price equals the ATC, and economic profits become zero.
b. The final price reflects the benefits of collusion between the firms.
c. Without collusion the firms are able to charge a higher price than before.
d. The final price exceeds the ATC, and economic profits are earned.
A government began 2013 with a budget deficit and a trade deficit. During the year, the government changed its policy and is now running a budget surplus. If all other factors hold constant, this change in policy will cause:
A. the exchange rate to decrease and the trade deficit to increase. B. the exchange rate to increase and the trade deficit to decrease. C. the exchange rate and the trade deficit to decrease. D. the exchange rate and the trade deficit to increase.