Use the following diagram to answer the next question.
Based on this diagram, we can say ________.
A. monetary policy is likely to be more effective at fighting a recession than fiscal policy
B. investment demand is very sensitive to changes in the interest rate
C. an increase in the money supply will have little effect on investment or aggregate demand
D. expansionary monetary policy will be more effective at increasing aggregate supply than aggregate demand
Answer: C
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If the opportunity cost of producing extra units of one good (expressed in terms of the amount of another good given up) remains constant, then the shape of the production possibilities frontier is
A. a vertical line. B. an upward-sloping line. C. a straight horizontal line. D. a straight downward-sloping line.
Which of the following is NOT included in the expenditure approach to calculating GDP?
A) investment B) wages C) consumption expenditure D) government expenditures on goods and services E) net exports of goods and services
An anti-inflation policy that involves announcing and executing tough measures to stop inflation is called _____
a. cold turkey b. red tape c. a pork-barrel policy d. chokehold e. time-inconsistency
Assuming that chicken and beef are substitutes, a decrease in the price of beef, other things being equal, will:
a. decrease the demand for beef. b. increase the demand for chicken. c. decrease the demand for chicken. d. increase the demand for beef.