If the price of ricotta cheese, an ingredient in lasagna, increases, then
A. The market supply curve for lasagna will shift to the left.
B. There will be a movement down along the market supply curve for lasagna.
C. The market supply curve for lasagna will shift to the right.
D. There will be a movement up along the market supply curve for lasagna.
Answer: A
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The reference base period for the CPI is
A) currently 1982 to 1984. B) currently 1913. C) whatever the political party that is in control of Congress decides. D) currently 2005. E) the previous year.
What two measures of macroeconomic activity are often referred to as the "twin deficits"?
A) the budget deficit and the trade balance B) net capital flows and net exports C) the foreign exchange deficit and net foreign investment D) the saving-investment deficit and the export deficit
Suppose the money demand function is given by Md/P = 640 + 0.1Y - 5000 (r + ?e). Suppose the central bank changes the nominal money supply depending on income and inflation: Ms = 1000 + 0.1Y - 4000?
(a) If expected inflation equals actual inflation = 0.03, Y = 1000, and r = 0.02, calculate the price level. (b) If inflation rises to 0.04 while the other variables remain as in part a, calculate the price level. (c) If expected inflation rises to 0.04 while the other variables remain as in part a, calculate the price level. (d) If the real interest rate rises to 0.03 while the other variables remain as in part a, calculate the price level.
According to Scenario 4-1, country A has net exports of:
a. $18 million. b. $8 million. c. $13 million. d. $9 million. e. $6 million.