In the basic 45° line model, what is the effect of a decrease in the price level?
A. The expenditure line will shift downward.
B. The expenditure line will shift upward.
C. There will be movement to the left on the expenditure line.
D. There will be movement to the right on the expenditure line.
Answer: B
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A. $303 in year 3 in Zorn. B. $5 in year 2 in Alta. C. $105 in year 3 in Alta. D. $200 in year 1 in Zorn.
Let's assume producers in Canada can make 200 units of beef or 50 units of oranges, and U.S. producers can make 50 units of beef or 200 units of oranges per time period. Which country faces the lowest opportunity cost of producing beef?
A) The U.S. B) Canada C) Both countries D) Neither country
To non-activists, which of the following is the most useful stabilization policy?
A) procyclical monetary and fiscal policy changes B) countercyclical monetary changes C) government spending changes D) None of these.
The useful economic life of a machine depends most importantly on
a) the depreciation rate b) the interest rate c) the tax rate d) risk e) the marginal revenue produced by the machine