Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4Refer to Figure 2.4. The economy moves from Point E to Point B. This could be explained by
A. a change in society's preferences for hybrid cars versus motorcycles.
B. an increase in economic growth.
C. an increase in unemployment.
D. a reduction in unemployment.
Answer: A
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Which of the following theories fails to explain persistent unemployment?
A) classical theory B) Friedman and Phelps fooling theory C) new Keynesian theory D) Both A and B are correct.
If the government wishes to promote a higher rate of growth of real GDP, a supply-side economist would argue the appropriate policy is
A) engaging in expansionary fiscal policy by lowering marginal tax rates. B) engaging in expansionary fiscal policy of increasing government spending. C) lowering marginal tax rates on people and raising them on corporations. D) leaving the economy alone and letting the natural forces bring it into a long-run equilibrium.
Refer to the figure below.
If a price ceiling were imposed at point G, then excess demand would be measured by the distance between points:
A. K and I B. F and I C. G and I D. F and K
For each bottle of wine that Italy produces, it gives up the opportunity to make 10 pounds of cheese. France gives up the opportunity to produce of 1 bottle of wine for every 25 pounds of cheese it produces. Which of the following is true about the
comparative advantage between the two countries? A) Italy has the comparative advantage in cheese. B) Italy has the comparative advantage in wine. C) France has the comparative advantage in wine and cheese. D) France has the comparative advantage in wine.