In Figure 32.1, at the supported price-quantity combination where production is unlimited, and government buys the excess, the variable cost to producers is 
A. 0HEQS.
B. 0HGQD.
C. 0ABQD.
D. 0HCQ*.
Answer: A
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A supply shock that reduces total factor productivity directly affects which term in the production function Y = AF(K, N)?
A) A B) F C) K D) N
Suppose there currently is an inflationary gap. What could the government do to bring the overall price level down?
A) nothing B) Reduce government spending. C) Increase government spending. D) Reduce the nation's aggregate supply.
The monetary policy reaction curve:
A. is the guideline the Fed publishes in setting their interest rate target. B. has remained fairly constant over the years. C. is set by Congress and given to the Fed as a guideline to follow. D. approximates the behavior of central bankers.
Purchases of domestic assets by foreign firms or households is called a:
A. trade deficit. B. trade surplus. C. capital outflow. D. capital inflow.