Figure 33-2
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Given the situation in graph (1) in Figure 33-2, what action could be expected from the economy’s self-correcting mechanism?
A. An increase in aggregate demand
B. A decrease in aggregate demand
C. An increase in aggregate supply
D. A decrease in aggregate supply
Answer: C
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a. medium of exchange, facilitation of trade, and unit of account b. unit of account, facilitation of trade, and store of value c. store of value, facilitation of trade, and double coincidence of wants d. facilitation of trade, medium of exchange, and unit of account e. medium of exchange, unit of account, and store of value
The law of comparative advantage explains why
a. individuals choose specialized careers. b. firms specialize in the production of certain goods. c. nations develop strengths in certain industries. d. All of the above are correct.
Which of the following statements regarding the use of gold as money is false?
A) The money supply would be easy to control because of the predictability of new gold discoveries. B) It is durable. C) It has value other than money. D) It is acceptable to traders.
Disease, poor nutrition, and substandard health care in developing nations can reduce growth in an economy by
A) reducing physical capital. B) reducing human capital. C) increasing technological change. D) increasing labor productivity.