The aggregate supply curve:
Is explained by the interest rate, real- balances,and foreign purchases effects.
gets steeper as the economy moves from the top of the curve to the bottom of the curve. 

shows the various amounts of real output that businesses will produce at each price level
 is downsloping because realpurchasing power increases as the price level falls
Growth is advantageous to a nation because it:
 promotes faster population growth. 

lessens the burden of scarcity. 

eliminates the economizing problem.
slows the growth of wants.
The use of money contributes to economic efficiency because
Governmental direction of the production and distribution of output can be avoided by using money.
 roundabout production could not occur without the availability of money.
it is necessary for the creation of capital goods.
  It promotes specialization by overcoming the problems with barter. 

 The four main tools of monetary policy are:  A. tax rate changes, the discount rate, open-market operations, and the federal funds rate.
B. tax rate changes, changes in government expenditures, open-market operations, and interest on reserves.
C. the discount rate, the reserve ratio, interest on reserves, and open-market operations. D. changes in government expenditures, the reserve ratio, the federal funds rate, and the discount rate.
5.
Kimberly voluntarily quit her job as an insurance agent to return to school full-time to earn an MBA degree. With degree in hand she is now searching for a position in management. Kimberly presently is: 

A)  cyclically unemployed. 
 B)  structurally unemployed. 

c) frictionally unemployed. 
 D) not a member of the labor force.
Assume that a bank initially has no excess reserves. If it receives $5,000 in cash from a depositor and the 
 bank finds that it can safely lend out $4,500, the reserve requirement must be:
A) zero. B) 10 percent . C) 20 percent. D) 25 percent 

Unemployment and/or productive inefficiencies:
A)   causetheproductionpossibilitiescurvetoshiftoutward . 
 B)  can exist at any point on a production possibilities curve. 
 C)  are both illustrated by a point outside the production possibilities curve. 

D)  are both illustrated by a point inside the production possibilities curve. 

If a nation's real GDP increases from 100 billion to 106 billion and its population jumps from 200 million 
 to 212 million, it real GDP per capita will: 

A) remain constant. B) fall by 6 percent. C) rise by 6 percent. D) fall by 12 percent.

 The effect of a government surplus on the equilibrium level of GDP is substantially the same as: 

A)  a decrease in saving. 
 B)  an increase in saving. 

C) an increase in consumption. D) an increase in investment.
Which of the following is a tool of monetary policy?
A)  open market operations 
 B)  changes in banking laws 

C)changes in tax rates 
 D) changes in government spending
In which of the following industries or sectors of the economy is output likely to be most strongly affected 
 by the business cycle?

 A) military goods B) capital goods C) textile products D) agricultural commodities
The real-balances effect indicates that:
A)  an increase in the price level will increase the demand for money, increase interest rates, and reduce consumption and investment spending. 

B)  a lower price level will decrease the real value of many financial assets and therefore reduce spending. 
 C)  a higher price level will increase the real value of many financial assets and therefore increase 
 spending. 

D)  a higher price level will decrease the real value of many financial assets and therefore reduce spending.
In which of the following industries or sectors of the economy is output likely to be most strongly affected 
 by the business cycle? 
 A) military goods B) capital goods C) textile products D) agricultural commodities
Assume that in a private closed economy consumption is $240 billion and investment is $50 billion, both 
 at the $280 billion level of domestic output. Thus:
A)  saving is $10 billion. 
 B)  unplanned decreases in inventories of $10 billion will occur. 

C)  the MPC is .80. 
 D)  unplannedincreasesininventoriesof$10billionwilloccur. 

When economists say that money serves as a unit of account, they mean that