Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C
B. B; C
C. B; A
D. D; B
Answer: D
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If the price of a movie download falls, the rental rate of DVDs ________ and the equilibrium quantity of DVDs rented ________
A) rises; decreases B) rises; increases C) falls; decreases D) falls; increases
The effect of a change in the price of tea on the quantity of coffee demanded is measured by the
a. price elasticity of demand b. substitute elasticity of demand c. cross-price elasticity of demand d. income elasticity of demand e. alternative elasticity of demand
The economy is at full employment when the actual rate of unemployment equals the
a. labor force minus the number of discouraged workers b. rate of frictionally unemployed plus the rate of structurally unemployed workers c. rate of cyclically unemployed plus the rate of structurally unemployed workers d. natural rate of unemployment minus the rate of cyclically unemployed workers e. rate of discouraged workers plus the rate of underemployed workers
The primary use of derivative contracts is:
A. for IRA and other pension plans since they only have value well into the future. B. to add to the profits an investor obtains through information asymmetry. C. to shift risk among investors. D. for investors seeking a greater return by taking greater risk.