Suppose that the technology used to produce computers advances. How does this change affect the supply of computers and the supply curve of computers?
What will be an ideal response?
An advance in technology increases the supply of computers. Hence increases in technology shift the supply curve of computers rightward.
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When the marginal propensity to consume foreign imports (MPCF) rises, ceteris paribus, what happens to the trade balance?
a. It increases. b. It decreases. c. It depends on what happens to the MPC of domestic goods. d. It will not change.
According to the modern view, the impact of expansionary monetary policy will
a. be the same in the long run as in the short run. b. be the same regardless of whether the effects of the policy are anticipated or unanticipated. c. initially be an increase in real output if the policy is unanticipated, but in the long run, the primary result will be a higher price level (inflation). d. initially be an increase in prices if the policy is unanticipated, but in the long run, the primary result will be larger real output.