In a graph of the production possibilities curve, the two axes of the graph indicate the:
A. Prices of the two products that a nation can produce
B. Maximum quantities of the two resources that a nation possesses
C. Price of the products on the vertical axis, and quantities on the horizontal
D. Quantities of the two products that a nation can produce
Answer: D
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If we observe a market where the quantity supplied exceeds the quantity demanded, but the market price does not fall, then one explanation for this observation is
A. the market has a price ceiling in place. B. consumers don’t really like this product. C. the market has a price floor in place. D. sellers must produce a minimum quantity of the good, regardless of the demand for the product.
In IS-LM analysis, the nominal interest rate is
A) purely a monetary phenomenon. B) purely a real phenomenon. C) both a monetary and a real phenomenon. D) neither a real nor a monetary phenomenon, but determined by government policy.
Which of the following can cause inflation?
A) increases in short-run aggregate supply B) increases in long-run aggregate supply C) decreases in short-run aggregate supply D) decreases in aggregate demand
There is easy entry into the ________ and ________ industries.
A. oligopolistic; monopolistic B. monopolistic; perfectly competitive C. perfectly competitive; monopolistically competitive D. monopolistically competitive; oligopolistic