The quantity of good Y is measured along the vertical axis, and the quantity of good X is measured along the horizontal axis. If the prices of both good Y and good X rise, the budget line
A. shifts outward to the right and the vertical and horizontal intercepts will both rise.
B. rotates, rising along the vertical axis but falling along the horizontal axis.
C. shifts inward to the left and both intercepts will decline.
D. none of these.
Answer: C
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In a world where the price level could adjust immediately to its new long-run level after a money supply increase
A) The dollar interest rate would increase because prices would adjust immediately and prevent the money supply from rising. B) The dollar interest rate would fall because prices would adjust immediately and prevent the money supply from rising. C) The dollar interest rate would fall because prices would adjust immediately and prevent the money supply from decreasing. D) The dollar interest rate would decrease because prices would adjust immediately and prevent the money supply from decreasing. E) The dollar interest rate would fall because prices would not be able to prevent the money supply from rising.
The joining of firms that are producing or selling a similar product is known as
A. economies to scale. B. a conglomerate merger. C. a horizontal merger. D. a vertical merger.
The figure above shows the U.S. production function. How would an increase in income taxes be shown in the figure?
A) a movement from point C to point B B) a movement from point A to point B C) an upward shift or rotation of the production function D) a downward shift or rotation of the production function E) None of the above because the effects of an increase in taxes cannot be shown in the figure.
Which of the following statements is TRUE?
A) Government spending as a percent of total national income has continuously decreased since the 1950s. B) Transfer payments are money payments made by the government for which no goods or services are currently received. C) Education is the largest category of federal government expenditures. D) Transfers in kind include Welfare, Social Security, and unemployment insurance benefits.