According to the classical theory, an inward shift in aggregate demand would reduce
A) real Gross Domestic Product (GDP) and the price level.
B) the price level but have no effect on real Gross Domestic Product (GDP).
C) real income but have no impact on the price Gross Domestic Product (GDP).
D) the price level but increase real Gross Domestic Product (GDP).
Ques. 2The total value of all outstanding federal government securities is
A) a flow variable.
B) the budget deficit.
C) total personal wealth.
D) none of the above.
Ques. 3The reason a corporation has retained earnings is to
A) pay unemployment taxes.
B) make investments that will increase the value of the stock.
C) avoid the double taxation of corporate profits.
D) be able to make unemployment payments.
Ques. 4Which of the following pairs of goods is LEAST likely to be a pair of complements?
A) gasoline and vehicles
B) coffee and sugar
C) beer and wine
D) razors and razor blades
Ques. 5Refer to the above figure. If the farmer has 50 acres of land, the farmer is producing at point a, and an acre of land yields 400 bushels of beans or 800 bushels of wheat, how much land is devoted to the production of wheat?
A) 8.5 acres
B) 10 acres
C) 12.5 acres
D) 15 acres
Ques. 6The growth rate of per capita real Gross Domestic Product (GDP) is a reasonable measure of
A) the amount of money each person has.
B) productive activity.
C) personal well-being.
D) quality of life.
Ques. 7Refer to above figures. Prior to the shift of the curves, which panel and which curve involve the existence of negative externality?
A) Panel 1 and S1
B) Panel 1 and S2
C) Panel 2 and D1
D) Panel 2 and D2
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