Figure 3.2 shows the total cost and total benefit curves for a professional guitarist. According to the graph, which of the following is the best number of hours the guitarist should spend practicing each day?
A. 3
B. 4
C. 6
D. 7
A. 3
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An unexpected change in nominal interest rate changes real interest rate by ____ in the short run
a. a smaller amount b. a larger amount c. the same amount d. an indeterminate percent
A crucial difference between the impact of an import quota compared to a tariff is that:
a. import quotas generate revenue to the domestic government, but tariffs do not. b. import quotas generate no revenue to the domestic government, but tariffs do. c. tariffs increase the prices paid by domestic consumers, but quotas do not d. both (a) and (c)
Suppose the market for loanable funds is in equilibrium. What would happen in the market for loanable funds, other things the same, if the Congress and President increased the maximum contribution limits to 401(k) and 403(b) tax-deferred retirement accounts?
a. the interest rate and quantity of loanable funds would increase b. the interest rate and quantity of loanable funds would decrease. c. the interest rate would increase and the quantity of loanable funds would decrease. d. the interest rate would decrease and the quantity of loanable funds would increase.
Unintended inventory changes
A. precipitate explosive inflations of highly unstable stagflation. B. are less important in Keynesian than in classical models. C. ensure that planned saving is always equal to planned investment. D. are signals to business firms to increase or cut production.