Assume that a consumer purchases two products and the consumer's money income increases. All other things equal, the most likely effect is:
A. no change in the consumer's buying pattern.
B. an inward shift in the budget line because the consumer can now purchase less of both products.
C. an outward shift in the production possibilities curve because the consumer can now satisfy more wants.
D. an outward shift in the budget line because the consumer can now purchase more of both products.
Answer: D
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The invention of the integrated circuit by Jack Kilby of Texas Instruments gave rise to the information age. What did this technological change do the short-run supply curve?
A) It moved the economy up along a stationary short-run aggregate supply curve. B) It shifted the short-run aggregate supply curve to the left. C) It shifted the short-run aggregate supply curve to the right. D) It moved the economy down along a stationary short-run aggregate supply curve.
If the Fed buys U.S. Treasury securities, then this
A) increases reserves, encourages banks to make more loans, and increases the money supply. B) decreases reserves, causes banks to reduce their loans, and decreases the money supply. C) decreases reserves, causes banks to reduce their loans, and increases the money supply. D) increases reserves, causes banks to reduce their loans, and increases the money supply.