Use the following graph to answer the next question.
Assume that the economy initially has a price level of P1 and output level Q1. If the government implements expansionary fiscal policy, it would bring the economy to
A. P2 and Q4.
B. P2 and Q2.
C. P1 and Q1.
D. P1 and Q3.
Answer: B
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If a lender checks credit reports on individuals before mailing out loan offers, it is most likely trying to avoid
A) moral hazard. B) moral dilemma. C) adverse selection. D) adverse reaction.
Explain why the portion of the national debt owed to foreigners is a serious matter, whereas the portion owed to U.S. citizens is of less concern. Why does the U.S. national debt pose less of a problem than the debts of Greece in 2010?
What will be an ideal response?
If the price of a good decreases while the quantity of the good exchanged on markets increases, then the most likely explanation is that there has been
a. a decrease in supply. b. an increase in supply. c. a decrease in demand. d. an increase in demand.
Which of the following is included in the study of macroeconomics?
A. wage rate of Ford's assembly-line workers B. prices of automobiles C. unemployment in the nation D. price of silver and gold