Suppose GDP ________ the level of potential output. We would expect to see ________ unemployment, rising wages, and rising prices.
A. exceeds; low
B. is? below; low
C. is? below; high
D. exceeds; high
Answer: A. exceeds; low
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A final good is one that
A) is purchased as an input in the production process. B) is purchased by its final user. C) is a natural resource used to produce a good. D) is used in the production of another good.
If large sectors of American industry are not very competitive, then the _______________ does not work as well as it could if American industry operated under a more perfectly competitive system.
Fill in the blank(s) with the appropriate word(s).
Monetarists can be described as a group of macroeconomists who
A) emphasize the importance of the federal government's involvement in the economy to dampen the harmful effects of the business cycle. B) emphasize the importance of the money supply as a determinant of macroeconomic activity. C) tend to view government spending and taxation policy as the chief means of stabilizing the economy. D) feel that money should not be created in the private banking system, but only by government.
Carol is very hungry. She has just sat down to eat. Her first bite gives her a certain level of utility. Her second bite increases her utility by more than the first bite. Her third bite increases her utility by more than the second bite. Carol has 40
bites left before she finishes. Which of the following statements is TRUE about Carol? A) Carol is being inconsistent with the law of diminishing marginal utility. B) Carol's total utility decreases with each bite. C) Carol's marginal utility will be negative when she takes her last bite. D) Carol will eventually experience diminishing marginal utility by the time she finishes eating, if her marginal utility begins to decline.