Growers expect that the price of a bushel of wheat will increase in one month. This belief results in
A) an increase in current supply of wheat.
B) a decrease in current supply of wheat.
C) a decrease in future supply of wheat.
D) no change in current or future supply of wheat.
B
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The interest-rate-based monetary policy transmission mechanism argues that an increase in the money supply
A) has no effect on aggregate demand but reduces long-run aggregate supply. B) has no effect on aggregate demand but increases short-run aggregate supply. C) causes interest rates to fall, which causes an increase in planned investment, and an increase in aggregate demand. D) causes the inflation rate to decline, which causes an increase in household consumption spending and an increase in aggregate demand.
If a perfectly competitive industry is in long-run equilibrium, then
A) price equals average cost. B) price is greater than average cost and equal to marginal cost. C) all firms earn the same accounting profits. D) marginal cost is less than average cost.
Mathematically, the value of the tax multiplier in terms of the marginal propensity to consume (MPC) is given by the formula:
a. (MPC - 1)/MPC. b. 1-[1/(1 - MPC)]. c. 1/MPC. d. MPC - 1.
Suppose that you own a house. What is the opportunity cost of living in the house?
A. There is no opportunity cost because you own the house. B. There is no opportunity cost unless you could set up a business in the house. C. The opportunity cost is the rent you could have received from a tenant if you didn't live there. D. The opportunity cost is the cost of your monthly mortgage payment plus bills.