Which of the following would lead to a change in both the quantity of a good buyers wish to purchase and in the quantity sellers wish to sell?
a. a change in the price of a substitute good
b. a change in buyers' incomes
c. a change in the price of a key input
d. a technological improvement
e. a change in the expected future price of the good
E
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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.
Assuming a simple Keynesian multiplier, and given an increase in planned investment of $100 billion, the effect on total output will be greater than $100 billion only if the
A) MPS is greater than zero. B) MPC is zero. C) MPS is less than zero. D) MPC is greater than one.
Based on your understanding of your roommate's preferences, you predict that he will select the spaghetti for his lunch at the cafeteria, but instead he chooses the gyros. How do you describe this event in terms of economic theory?
A) Your roommate is irrational. B) Your roommate does not know what is in his own best interests. C) You roommate does not know his own preferences as well as you do. D) You constructed a model that made a prediction, and the prediction was refuted.
Which of the following reforms would reduce the likelihood of a future financial crisis?
a. increased regulations that would make it more difficult for lenders to foreclose on borrowers who are delinquent on mortgage payments b. expansion of government-sponsored lending in order to make loanable funds more readily available to sub-prime borrowers c. institutional changes that would strengthen the property rights of shareholders and provide financial managers with a stronger incentive to pursue long-run objectives d. frequent regulatory changes in order to search for and find the combination that would be most effective