Refer to the information provided in Figure 2.2 below for the economy of Microland to answer the question(s) that follow.
Figure 2.2Refer to Figure 2.2. You correctly deduce that all resources are fully employed and there are no production inefficiencies if this economy is currently operating at a point
A. either inside or along the production possibility frontier.
B. inside the production possibility frontier.
C. along the production possibility frontier.
D. outside the production possibility frontier.
Answer: C
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The vertical intercept of the consumption function equals ________ and the slope equals ________.
A. autonomous consumption; the MPC. B. the planned component of consumption; the unplanned component of consumption. C. the unplanned component of consumption; the planned component of consumption. D. the MPC; autonomous consumption.
In the short-run macroeconomic equilibrium
A) real GDP equals potential GDP and aggregate demand determines the price level. B) the price level is fixed and short-run aggregate supply determines real GDP. C) real GDP and the price level are determined by short-run aggregate supply and aggregate demand. D) real GDP is always less than potential GDP.
Which of the following correctly describes the Phillips curve?
a. A curve showing the inverse relationship between interest rates and the quantity of money demanded. b. A curve showing the direct relationship between interest rates and the quantity of money demanded. c. A curve showing the direct relationship between the inflation rate and the unemployment rate. d. A curve showing the inverse relationship between the inflation rate and the unemployment rate.
Disclosing information in more usable ways to decision-makers:
A. increases instances of rational ignorance. B. can nudge people toward making better decisions. C. will never affect a person's decision. D. effectively eliminates certain choices from a person's options.