Take this raw score on the diagnostic exam and compare it to the table that follows to estimate where you might score at this point. Of the following choices, the one most likely to be preferred by supply-side economists would be A increased government spending. B a decrease in the real interest rate. The opportunity cost of the dentist flossing my teeth is the revenue earned from a procedure that only he is qualified to perform. An increase in corporate optimism will have which of the following effects in the market for loanable funds? Questions from Chapter 11 20. A steel company must decide whether to open a plant in Indiana or in Indonesia.
Suppose a nation is experiencing an annual budget surplus and uses some of this surplus to pay down part of the national debt. It is intended to give you an idea of where you stand with your preparation. D Nation Y has absolute advantage in paper production, and Nation X has absolute advantage in crepe production. E —The %Δ in real income is equal to the %Δ in nominal income less the rate of inflation. How can we place a dollar value on the nap? The opportunity cost of a pizza crust is one-half of a pastry. The bakery cannot sell illegal drugs from the back door, and the chef is not free to offer open-heart surgery with her bagels.
A 5 percent decrease B ¼ percent increase C 3 percent increase D 3 percent decrease E 5 percent increase 11. Lower money demand, one financial asset, creates rising demand for bonds, an alternative financial asset. Regardless of the decision maker—individual, firm, or government—the reality of scarce resources creates a trade-off between the opportunity that is taken and the opportunity that was not taken and thus forgone. B Both supply and demand shift leftward. D Paper money can be exchanged at commercial banks for an equal amount of gold. A student decides that, having already spent three hours studying for an exam, she should spend one more hour studying for the same exam.
E a decrease in the money demand. What type of unemployment is this? The same could be said for individual laborers. Buyers and sellers, acting independently, and motivated by self-interest, freely move in and out of individual markets. B increase aggregate demand, which will increase real output and increase employment. A baking sheet used to bake crumpets might be quite useless in producing tea leaves. .
C banks lend all excess reserves to borrowing customers. In other words, if you use a scarce resource to pursue activity X, the opportunity cost of activity X is activity Y, the next best use of that resource. We already know that the marginal cost of producing pizza crusts increases. C lower taxes on household income. Part C : 2 points i.
وأسرار جمعية كوكلوكس كلان العرقية. The economy is producing the maximum output for a given level of technology and resources. A —If prices and wages are flexible, the long-run economy readjusts to full employment. D Short-run aggregate supply is upward sloping as nominal wages do not quickly respond to price level changes. With fewer consumers demanding foreign-built cars, the demand for foreign currency falls, decreasing the value of foreign currency, appreciating the value of the U. B expansionary monetary policy by selling Treasury securities. An increase in the consumer price index is commonly referred to as A economic growth.
This implies that the short-run aggregate supply curve is A upward sloping at full employment. A —Economic capital includes machinery, like a cement mixer, used to produce goods and services. Opportunity Cost At the most basic level, the opportunity cost of doing something is what you sacrifice to do it. If a nation is operating at full employment, and the central bank engages in contractionary monetary policy, the nation can expect the interest rate, the purchases of new homes, and the unemployment rate to change in which of the following ways? The supply of loanable funds includes savers, not investors. Corn is exchanged in a competitive market. B a nation imposes tariffs and quotas on imported goods. C decrease as the purchasing power of the dollar is falling, decreasing the interest rate.
Workers and students must choose from a wide range of employment and education opportunities. Simply being able to produce more of a good does not mean that the firm produces that good at a lower opportunity cost. E Net exports will rise and the dollar will appreciate in value. A This nation has experienced a permanent decrease in its production capacity. How would fiscal and monetary policymakers combine spending, tax, and monetary policy to fight a recessionary gap, while avoiding large budget deficits? Perhaps some of the capital i. The best example of a negative supply shock to the economy would be A a decrease in government spending.