An increase in supply is shown by:
a) a movement up along the supply curve.
b) a movement down along the supply curve.
c) a rightward shift of the supply curve.
d) a leftward shift of the supply curve.
e) an initial movement up and then down along the same supply curve.
Ans: c) a rightward shift of the supply curve.
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The opportunity cost of the financial resources used to finance the purchase of capital is
A) the price of the capital goods purchased. B) the real interest rate. C) the quantity of investment demanded. D) the supply of investment. E) capital investment.
If aggregate demand equals output,
A) the economy is in a recession. B) output will increase. C) output will fall. D) the economy is at its equilibrium level.
Government purchases of goods and services
a. consist of current output of goods and services purchased by the federal government only. b. includes the current output of goods and services bought by the federal, state, and local governments. c. are the largest component of gross national product. d. include both defense spending and spending on social security.
If something is a medium of exchange, then it:
a. serves as a yardstick for measuring the value of other goods. b. is a means of holding wealth for the future. c. has an absolute value in gold. d. is widely accepted as payment for purchases.