When the price level falls:
A. there is a decrease in spending that is sensitive to interest-rate changes.
B. holders of financial assets with fixed money values increase their spending.
C. there is a decrease in the quantity of goods demanded as net exports.
D. the demand for money rises.
Answer: B
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Workers and firms both expect that prices will be 3% higher next year than they are this year. As a result
A) aggregate demand will increase by 3%. B) workers will be willing to take lower wages next year. C) the purchasing power of wages will rise if wages increase by 3%. D) the short-run aggregate supply curve will shift to the left as wages increase.
The small city of Pleasantville is considering building a public swimming pool that costs $1,000. Each resident's marginal benefit of the swimming pool is shown below. It takes a 4/5 majority to pass any tax measure, and all residents must vote.VoterMarginal BenefitKyle$420Dylan$360Fran$350Ronnie$190Sam$170 Building the swimming pool would ________ total economic surplus because ________.
A. decrease; taxes would have to be collected to build the pool B. increase; the cost of building the pool can be passed to users from other towns C. increase; the total social benefit of the pool is greater than the total cost of the pool D. decrease; the total cost of the pool is greater than the total social benefit of the pool
Country Y has fifteen thousand acres of land and forty-five thousand laborers, whereas the Rest of the World has one hundred thousand acres of land and two hundred thousand laborers. These countries produce a labor-intensive Good A, and a land-intensive Good B. When trade opens up between these countries, it can be inferred that Country Y will
A. import both goods. B. export both goods. C. export Good B, and import Good A. D. export Good A, and import Good B.
When you have a job and your employer compensates you for your time with money, resulting in both of you being better off, it is an example of a voluntary exchange.
Answer the following statement true (T) or false (F)