In an economy, the value of inventories fell from $75 billion in 2015 to $63 billion in 2016. In calculating total investment for 2016 compared to 2015, national income accountants would:
A. increase it by $63 billion.
B. increase it by $138 billion.
C. decrease it by $75 billion.
D. decrease it by $12 billion.
Answer: D
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Suppose the measured unemployment rate is 7.5% and the true natural rate of unemployment is 5.1%. If the chair of the Fed believes the natural rate of unemployment to be 6.7%, then the chair will
A) stimulate the economy when it should be slowed. B) slow the economy when it should be stimulated. C) stimulate the economy, exactly as called for. D) slow the economy, exactly as called for.
Which tool do economists use to determine the effect of an economic event on equilibrium price and quantity?
a. equilibrium price b. the four-step process c. demand schedule d. supply schedule
An increase in the unemployment rate would be shown on a production possibilities curve by
A. shifting the entire curve outward. B. shifting the entire curve inward. C. moving from a point on or near the curve to a point closer to the origin, rather than shifting the entire curve. D. moving from a point inside the curve to a point on the curve, rather than shifting the entire curve.
The diamond-water paradox illustrates the idea that ________ determines what consumers are willing to pay for a particular good
A) total utility B) the real-income effect C) marginal utility D) the substitution effect