If long-run economic growth is NOT accompanied by a change in aggregate demand, the result will be
A. appreciation of the dollar.
B. persistent inflation.
C. devaluation of the dollar.
D. secular deflation.
Answer: D
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Refer to Table 14-4. Does Alistair have a dominant strategy and if so, what is it?
A) There are two dominant strategies: if Baine increases its advertising budget, then Alistair's best bet is to keep its budget the same but if Baine does not increase its budget then Alistair should raise its advertising budget. B) Yes, Alistair should increase its advertising budget. C) Yes, Alistair should keep its advertising budget as is. D) No, there is no dominant strategy.
A budget line is a straight line designed to show
a. how income is related to hours worked. b. all combinations of two goods that can be purchased with a given income. c. the way a homemaker should divide money among several commodities. d. that if more money is spent on one good, the breadwinner must work all the harder to maintain a satisfactory level of living. e. preferences for goods and services.
Normative economics looks at outcomes of economic behavior and evaluates them as good or bad.
Answer the following statement true (T) or false (F)
Banks decide to raise the interest rate they pay on checking accounts from 1% to 2%. This action would
A. decrease money demand, shifting the LM curve up and to the left. B. increase money demand, shifting the LM curve down and to the right. C. decrease money demand, shifting the LM curve down and to the right. D. increase money demand, shifting the LM curve up and to the left.