In an open economy (as compared to a closed one, without international trade)
A. monetary policy is weaker, fiscal policy is more powerful
B. fiscal policy is weaker, monetary policy is more powerful
C. both monetary and fiscal policy are more powerful
D. both monetary and fiscal policy are weaker
Ans: B. fiscal policy is weaker, monetary policy is more powerful
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Use the figure below to answer the following question.
The diagram above shows three supply curves for apples. A movement from point a to point b is caused by a change in the
A. price of resources used to produce apples. B. technology of apple farming. C. number of apple farmers. D. price of apples in the market.
In the graph below, the price of capital is $500 per unit. Which of the following combinations of capital and labor lies on the expansion path?
A. 500L, 100K B. 1100L, 220K C. 800L, 160K D. both a and b E. none of the above
Compared to an independent central bank, elected officials are likely to:
A. favor long-run stability over short-term prosperity. B. choose monetary policies that are overly accommodative. C. prefer interest rates to vary more often. D. sacrifice short-term growth to keep future inflation low.
Refer to the graph shown. When the market is in equilibrium, total surplus is area:
A. A plus area F plus area E plus area D. B. A plus area F. C. E plus area F. D. A plus area B.