Referring to Figure 1.4, the opportunity cost of producing the third unit of pizza is 
A. six units of soda.
B. three units of soda.
C. the same as the opportunity cost of producing the first unit of pizza.
D. one unit of soda.
Answer: C
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In Macroland, currency held by the public is 2,000 econs, bank reserves are 300 econs, and the desired reserve/deposit ratio is 10 percent. If the Central Bank prints an additional 200 econs and uses this new currency to buy government bonds from the public, the money supply in Macroland will increase from ________ econs to ________ econs, assuming that the public does not wish to change the amount of currency it holds.
A. 5,000; 2,000 B. 3,000; 5,000 C. 5,000; 7,000 D. 20,000; 22,000
Rising health care spending is a problem confronting the federal government because
A) it is the government's job to make sure everyone receives the health care they need. B) federal spending on health care has increased rapidly over the last thirty years. C) the federal-funded VA hospitals have been expanding faster than government revenues can provide for. D) the medical expenses of federal employees has been rising at a rate much faster than for non-federal workers.
If the Fed does not take into account the additional policy channels available in an open economy, then ________ when conducting contractionary monetary policy
A) it is likely to decrease GDP too much and cause a recession B) it is likely to decrease GDP too little and inflation will persist C) it is likely to increase GDP too little and cause a recession D) it is likely to increase GDP too much and inflation will persist
Suppose you read in the Wall Street Journal that actual investment in Canada in 2003 was less than the intended investment Canadian businesses had hoped to make. You would conclude that in 2003, the level of inventories in Canada was
a. less than desired and that Canadian output rose b. less than desired and that Canadian output fell c. greater than desired and that Canadian output rose d. greater than desired and that Canadian output fell e. greater than desired but would be unable to tell what effect it had on Canadian output