Complete crowding out occurs when the
A) IS curve is horizontal.
B) IS curve is vertical.
C) LM curve is horizontal.
D) LM curve is vertical.
D
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Suppose Ethan and Ava work in a farm that grows apples and oranges of the same size. In one hour, Ethan can pick 8 pounds of apples or 1 pound of oranges. Ava can pick 6 pounds of apples or 1 pound of oranges. It can be concluded that
A) Ava has a comparative advantage in picking apples. B) Ava has an absolute advantage in picking apples. C) Ethan has a comparative advantage in picking apples. D) Ethan has an absolute advantage in picking oranges.
Which of the following would be included in the GDP Price Index but not in the Consumer Price Index?
a. The price of a Chrysler automobile b. The price of a fighter aircraft c. The price of a used computer d. The price of a tube of toothpaste e. The price of a bottle of shampoo
When people trade goods for money, money is being used as a medium of exchange.
Answer the following statement true (T) or false (F)
In a booming economy, fiscal policy automatically becomes:
A. expansionary as tax rates fall and welfare payments rise. B. contractionary as tax rates rise and welfare payments fall. C. contractionary as tax rates fall and welfare payments rise. D. expansionary as tax rates rise and welfare payments fall.