A substitution effect of a price change is represented by:
A) movement along the same indifference curve.
B) movement to a different indifference curve.
C) a change in the initial budget line to a new budget line.
D) a change in the slope of the initial budget line.
A
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The sum of currency and reserves of depository institutions is the ________
A) reserves of the Fed B) assets of the Fed C) monetary base D) vault cash
A conclusion of the theory of rational expectations is that, in the short run, the impact of a correctly anticipated fiscal policy designed to decrease AD will:
a. result in no net change in AD once people's expectations adjustments have been accounted for b. shift AD in the opposite direction intended once people's expectations adjustments have been accounted for. c. decrease the price level. d. result in no change in the price level.
If the United States could produce 4 tons of potatoes or 2 tons of wheat per worker per year, while Ireland could produce 3 tons of potatoes or 2 tons of wheat per worker per year, the country with the comparative advantage in producing wheat is ____ and the country with the absolute advantage in producing potatoes is ____
a. the United States; the United States b. the United States; Ireland c. Ireland; the United States d. Ireland; Ireland
You are the manager of a monopoly that faces a demand curve described by P = 230 ? 20Q. Your costs are C = 5 + 30Q. The profit-maximizing output for your firm is:
A. 5. B. 7. C. 6. D. 4.