Governments usually accept goods inflation as long as it stays low, which for the United States currently means around:
A. 5.5 to 6 percent.
B. 3.5 to 4 percent.
C. 1 to 2.5 percent.
D. 7.5 to 8 percent.
Answer: C
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If a technological advance takes place in the computer industry, then the equilibrium price of a computer will ________ and the equilibrium quantity will ________
A) fall; increase B) fall; decrease C) rise; increase D) rise; decrease
If the ________ cost of production for two goods is different between two countries then mutually beneficial trade is possible
A) explicit B) marginal C) opportunity D) implicit
Banks decide to raise the interest rate they pay on checking accounts from 1% to 2%. This action would
A) increase money demand, shifting the LM curve up and to the left. B) increase money demand, shifting the LM curve down and to the right. C) decrease money demand, shifting the LM curve up and to the left. D) decrease money demand, shifting the LM curve down and to the right.
Refer to the table below. Suppose the profit for each unit of paper product is $3.00 and the profit for each unit of lumber is $13.50 and Big Oaks is producing the profit-maximizing quantity of lumber and paper products. If the profit from each unit of paper product increases from $3.00 to $4.00 and the profit for each unit of lumber does not change, to maximize profit, Big Oaks should produce a
________ proportion of paper products and produce ________ units of paper products and lumber.
Big Oaks can produce either paper products or lumber with each tree that they harvest. Because Big Oaks can adjust the amount of paper products and lumber they produce from the harvested trees, paper products and lumber are produced in variable proportions. The above table summarizes Big Oaks production possibilities from each harvested tree.
A) smaller; less
B) smaller; more
C) greater; less
D) greater; more