Which of the following purchases is included in gross domestic product account?
A) Purchases of bibles from a Christian bookstore
B) Purchases of how-to manuals from a local hardware store
C) Purchases of anti-capitalist literature from a radical, student-managed bookstore
D) All of the above.
E) None of the above.
D
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Kiwis and strawberries are substitutes for consumers. An increase in the price of a kiwi coupled with an increase in the number of strawberry growers ________ the equilibrium price of a pound of strawberries and ________ the equilibrium quantity of
strawberries. A) raises; increases B) lowers; probably changes, but more information is needed to determine if it increases or decreases C) lowers; increases D) probably changes, but more information is needed to determine if it rises or falls; increases E) raises; probably changes, but more information is needed to determine if it increases or decreases
Everything else held constant, abolishing the individual income tax will
A) increase the interest rate on corporate bonds. B) reduce the interest rate on municipal bonds. C) increase the interest rate on municipal bonds. D) increase the interest rate on Treasury bonds.
Why does the price level in a perfectly competitive market move toward the zero-profit point?
a. Because firms enter and exit the market in response to gains and losses b. Because short-run losses reverse the effects of long-run gains c. Because profitable firms increase short-run productivity d. Because firms operate below the average cost curve
The Fed would use a reverse repo when they:
A. forecast a permanent increase in the demand for monetary base. B. forecast a permanent decrease in the demand for monetary base. C. want to temporarily increase the monetary base. D. want to temporarily decrease the monetary base.