Refer to Figure 15-5. In the figure above, the movement from point A to point B in the money market would be caused by
A) a decrease in real GDP.
B) an open market sale of Treasury securities by the Federal Reserve.
C) an increase in the required reserve ratio by the Federal Reserve.
D) an increase in the price level.
D
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
What are some reasons why coordination of economic affairs through the price system may not work perfectly?
What will be an ideal response?
The sale of each iPhone in the U.S. counts as an:
A. import, because they are assembled in Mexico. B. export, because they are produced in the U.S. C. export, because they are assembled in China. D. import, because they are assembled in China.
Suppose that a regulated industry experiences an increase in the price of inputs used to produce the good. Which of the following statements is TRUE?
A. An increase in price will occur quicker in the capture hypothesis than the share-the-gains, share-the-pain theory. B. An increase in price will occur quicker in the share-the gains, share-the-pain theory than the capture hypothesis. C. Under both the capture hypothesis and the share-the-gains, share-the-pain theory profits will decrease. D. In the capture hypothesis there will be an increase in price but not in the share-the-gains, share-the-pain theory.