For both parties to gain from trade, the price at which they trade must lie between the two opportunity costs
a. True
b. False
Indicate whether the statement is true or false
True
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If the MPS is 0.1 and the income tax rate is 0.33, and the fraction of income spent on imports is 0.25, then the multiplier is
A) 2.5. B) 1.47. C) 1.51. D) 1.55.
An open-market purchase of government securities by the Fed will:
A. increase bank reserves, and the money supply will increase. B. increase bank reserves, and the money supply will decrease. C. decrease bank reserves, and the money supply will decrease. D. decrease bank reserves, and the money supply will increase.
The six debates over macroeconomic policy exist mostly because
a. economists disagree over basic issues such as the importance of saving for economic growth. b. there are tradeoffs and people disagree about the best way to deal with them. c. politicians offer misleading information. d. people fail to clearly see the benefits or the costs of most changes.
Refer to the information provided in Figure 3.18 below to answer the question(s) that follow.
Figure 3.18Refer to Figure 3.18 The market is initially in equilibrium at Point A. If demand shifts from D1 to D2, the equilibrium price will change from ________ and the equilibrium quantity will change from ________.
A. $3.00 to $4.00; 250 to 350 B. $4.00 to $3.00; 250 to 350 C. $3.00 to $4.00; 350 to 250 D. $4.00 to $3.00; 350 to 250