A factual claim about how the world actually works is a ________ statement.
A. positive
B. irrational
C. normative
D. marginal
Answer: A
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In the run up to the war in Iraq that began in 2003, one of the many concerns raised was that a war could result in a decrease in the supply of oil. At the same time, the U.S
economy was having a hard time recovering from the recession of 2001 and, as a result, incomes of many consumers had decreased (due to layoffs, wage cuts, and so forth). All else constant, it was reasonable to predict, with certainty, that the combination of these two factors would cause the equilibrium: A) quantity of oil to decrease. B) quantity of oil to increase. C) price of oil to increase. D) price of oil to decrease.
Refer to Table 2-11. If the two countries specialize and trade, who should export motorcycles?
A) There is no basis for trade between the two countries. B) Ireland C) Scotland D) They should both be importing motorcycles.
An increase in input productivity will:
A. shift the aggregate supply curve leftward. B. reduce the equilibrium price level, assuming downward flexible prices. C. reduce the equilibrium real output. D. reduce aggregate demand.
Refer to the graph below. Assume that the economy is initially at equilibrium at point C, and that the government has adopted a "hands-off" policy approach. If demand-pull inflation occurs, then the final long-run equilibrium point will be point __; while if cost-push inflation occurs (starting at point C), then the final long-run equilibrium point will be point __.
A. A; C
B. D; B
C. A; A
D. D; A