When OPEC nearly tripled the price of oil in late 1973,
A) the U.S. price level fell because production became too expensive.
B) U.S. real GDP increased as profits by oil producers increased.
C) U.S. real GDP did not change although the price level rose.
D) both U.S. real GDP and the price level increased.
E) the U.S. price level rose and real GDP decreased.
E
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Under monopolistic competition, firms make zero economic profit in the long run and produce at the minimum ATC
Indicate whether the statement is true or false
The tax multiplier is greater than the spending multiplier regardless of the value of the marginal propensity to consume (MPC)
a. True b. False Indicate whether the statement is true or false
In which of the following situations would a person be best off in real terms?
a. Receiving a 10 percent increase in a nominal wage, with an 8 percent rate of inflation in the economy b. Receiving a 3 percent increase in a nominal wage, with a 0 percent rate of inflation in the economy c. Receiving a 4 percent increase in a nominal wage, with a 5 percent rate of inflation in the economy d. Receiving no increase in a nominal wage, with a 5 percent rate of deflation in the economy e. Receiving a 2 percent decrease in a nominal wage, with a 6 percent rate of deflation in the economy
Suppose the problem is the stereo noise in the dorm. On the graph on the next page the amplifier dial numbers are located on the horizontal axis. The vertical axis measures the marginal costs and benefits of various levels of music (noise). Also measured on the vertical axis is the marginal cost of insulating the walls to prevent the externalities from penetrating the wall. 
If she has the property rights with negotiation impossible, then what will the outcome be?
A. You will play to 4 and she will absorb the noise even though she dislikes it. B. You will shut your stereo off. C. You will play to 3 and insulate so that the noise does not reach her. D. You will play to 6 and she will insulate her walls.