Refer to Figure 8.9. At the market price of $18, if this farmer produces the profit maximizing quantity, what profit will he make?
A) $0
B) $2,000
C) $700
D) indeterminant from this information
A) $0
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Use the following graph to answer the next question.
Which of the following factors will shift AS1 to AS2?
A. A decrease in business subsidies B. An increase in real interest rates C. A decrease in business taxes D. An increase in input prices
The quantity theory of money seeks to explain the connection between money and
A) output. B) unemployment. C) prices. D) interest rates.
Compared to the Keynesian transmission mechanism, the monetarist transmission mechanism is
A) direct. B) indirect. C) inverse. D) none of the above
The budget of an unconstrained government is similar to a common pool resource, and this will lead to
A) lower interest rates and spending levels consistent with economic efficiency. B) excessive spending and budget deficits. C) lower taxes and a deficient level of spending. D) a deficient level of spending and budget surpluses.