If the market clearing price of computer tablets falls from $400 to $300, and the market clearing output decreases from 5 million to 4 million units,
A) demand decreased and supply remained unchanged.
B) supply increased and demand remained unchanged.
C) demand increased and supply remained unchanged.
D) supply decreased and demand remained unchanged.
A
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
Which of the following is an assumption used when drawing a production possibilities frontier?
i. Human wants and desires are limited to what is available. ii. Only two goods are considered. iii. The level of technology is fixed and unchanging. A) ii only B) i and iii C) i only D) i, ii, and iii E) ii and iii
Suppose the Fed conducts an open market purchase of bonds. This monetary policy action will tend to cause
A) the price of bonds to increase, and the interest rate to increase. B) the price of bonds to increase, and the interest rate to decrease. C) the price of bonds to decrease, and the interest rate to increase. D) the price of bonds to decrease, and the interest rate to decrease.
A cyclical deficit is the portion of the deficit that exists when:
A. the economy is at potential income. B. inflation is fully anticipated. C. inflation is not fully anticipated. D. the economy is below potential income.