The flatter is the LM curve
A) the more effective is fiscal policy.
B) the less effective is fiscal policy.
C) the less is the interest sensitivity of saving.
D) the less is the interest sensitivity of the money supply.
A
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Suppose the income-consumption curve for goods X and Y is upward sloping. If the price of good Y increases and the income-consumption curve rotates in clockwise fashion, then we know that:
A) X and Y are complements. B) X and Y are both inferior goods. C) X and Y are substitutes . D) Y is an inferior good.
In the first quarter of 2009, the United States trade deficit fell to its lowest level in a decade. This means that
A) the United States imported more from the rest of the world than it exported to the rest of the world. B) foreign countries exported more to the United States than they imported from the rest of the world. C) foreign countries imported more from the United States than they exported to the United States. D) the United States exported more to foreign countries than it imported from the rest of the world.
Suppose you are very picky about your outdoor BBQ experiences --- and you need exactly 1 cup of lighter fluid for each bag of charcoal you use. If you have either leftover charcoal or leftover lighter fluid, you simply discard it. a. With cups of lighter fluid on the horizontal and bags of charcoal on the vertical axis, illustrate some of your indifference curves. b. Suppose that your favorite charcoal has just gotten better because the producer has infused the charcoal with half a cup of lighter fluid per bag. How does your answer to (a) change? c. How could you change the units in which lighter fluid is measured on the horizontal axis to get your graph from (b) to look the same as you original graph in (a)?
What will be an ideal response?
At an equilibrium price: a. quantity demanded exceeds quantity supplied. b. quantity demanded equals quantity supplied
c. quantity demanded is less than quantity supplied. d. there is no scarcity.