Use the following diagram to answer the next question.
Assume the economy is initially on aggregate demand AD3. The Fed should ________.
A. lower the prime rate
B. lower the discount rate
C. raise the reserve requirement
D. buy bonds
Answer: C
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Refer to Figure 7-3. If there was no quota, how many pounds of peanuts would domestic producers supply?
A) 10 million B) 28 million C) 30 million D) 40 million
If there is initially an
A) excess demand for money, the interest rate will fall, and the supply of money it will rise. B) excess supply of money, the interest rate will fall, and if there is initially an excess demand, it will rise. C) excess supply of money, the interest rate will rise, and if there is initially an excess demand, it will fall. D) excess supply of money, the interest rate will fall, and if there is also an excess demand, it will fall rapidly. E) excess supply of money, the interest rate will rise, and if there is also an excess demand, it will rise rapidly.
The table below shows the quantity of labor (measured in hours) and the productivity of labor
Refer to the above table. In Year 2, the economy's real GDP was:
A. $400,000
B. $420,000
C. $462,000
D. $500,000
An example of fiscal policy is
A) a reduction in government spending. B) an increase in autonomous spending by consumers. C) a reduction in investment spending by the private sector. D) an increase in Social Security spending by the elderly.