We cannot predict the effect on the equilibrium quantity, but know that the market clearing price will decrease when
A) supply increases and demand increases.
B) supply decreases and demand decreases.
C) supply decreases and at the same time demand increases.
D) supply increases and at the same time demand decreases.
Ques. 2Suppose you purchased 500 shares of stock in 2013 for 15 a share, and the price now is 20 a share. If you sell the stock, then your capital gain is
A) 2500.
B) 1000.
C) 10000.
D) indeterminate without knowing the inflation rate.
Ques. 3Other things being equal, during a period when the federal government issues more Treasury securities to borrow funds
A) the flow of government expenditures during that period must exceed the flow of tax revenues.
B) the flow of government expenditures during that period must exceed the stock of tax collections.
C) the stock of government deficit spending during that period must exceed the flow of tax revenues.
D) the stock of government deficit spending during that period must exceed the stock of tax collections.
Ques. 4Suppose an economy originally in long-run equilibrium experiences a decrease in aggregate demand. According to the classical model
A) real Gross Domestic Product (GDP) will not change but the price level will fall.
B) real Gross Domestic Product (GDP) will fall, and then the price level will fall also.
C) the price level will not change but real Gross Domestic Product (GDP) will fall.
D) real Gross Domestic Product (GDP) will fall, wages will fall, but the prices of goods and services will stay the same.
Ques. 5One major reason that economists are concerned about unemployment is that
A) unemployment always leads to frictional unemployment.
B) unemployment reduces the size of the labor force.
C) unemployment shifts the production possibilities curve outward.
D) the economy is producing less output than if there were full employment.
Ques. 6When Country X has high economic growth, this country has
A) a high level of real Gross Domestic Product (GDP).
B) a high level of per capita real Gross Domestic Product (GDP).
C) a large increase in per capita real Gross Domestic Product (GDP).
D) a large increase in personal income.
Ques. 7When the purchase price of an asset is less than its sale price, then there is a
A) budget deficit.
B) corporate income tax.
C) capital gain.
D) capital loss.
Ques. 8We cannot predict the effect on the market clearing price, but know that the equilibrium quantity will decrease when
A) supply increases and demand decreases
B) supply decreases and demand increases.
C) supply and demand for a product simultaneously decrease.
D) supply and demand for a product simultaneously increase.
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