17.
The country of Kemper is on its aggregate production function at point W in the above figure. The government of Kemper passes a law that makes 4 years of college mandatory for all citizens. After all citizens have their education, the economy will _____
(A) move to point such as Y.
(B) move to point such as Z.
(C) remain at point W.
(D) move to point such as X.

40.Country A is on its aggregate production function at point W in the followingfigure. The government of country A passes a law that makes 4 years of collegemandatory for all citizens. After all citizens have their education, the economy will (A) move to point such as Y. (B) remain at point W.(C) move to point such as X. (D) move to point such as Z.

18.In the above figure, the demand for loanable funds curve is drawn for the average expected profit. If the real interest rate is constant at 6 percent and the expected profit falls, the amount of loanable funds demanded will be _____ (A) greater than $600 billion. (B) between $450 billion and $600 billion. (C) less than $450 billion. (D) $450 billion.

19. The banking system has just experienced an increase in deposits of $50,000. The currency drain ratio is 20 percent and the desired reserve ratio is 10 percent. What does the money multiplier equal? (A) 0.25 (B) 10.00 (C) 3.33 (D) 4.00

20.In the above figure, at the price level of 140 and real GDP of ______ (A) $5 trillion, firms will not be able to sell all their output. (B) $15 trillion, consumers will not be able to buy all the goods and services they demand. (C) $5 trillion, consumers will not be able to buy all the goods and services they demand. (D) $15 trillion, firms will not be able to sell all their output.

21.In the above figure the economy is initially at point A on the aggregate expenditure curve $AE_0$. Suppose firms expect profits to increase and decide to increase investment. As a result ______ (A) there is a movement along $AE_0$ to a point such as B. (B) there is a movement along $AE_0$ to a point such as C. (C) the AE curve shifts downward to a curve such as $AE_1$. (D) the AE curve shifts upward to a curve such as $AE_2$.

22. Which of the following could lead to demandpull inflation? (A) an increase in the quantity of money (B) an increase in the money wage rate (C) a decrease in exports (D) an increase in oil prices

23. An increase in the expected inflation rate shifts the ______ (A) longrun Phillips curve upward. (B) longrun Phillips curve downward. (C) shortrun Phillips curve downward. (D) shortrun Phillips curve upward.

24. Suppose that the U.S. interest rate is 5 percent and the Japanese interest rate is 1 percent. The effect of this difference in the foreign exchange market is that ______ (A) investors expect the yen to depreciate against the dollar. (B) investors expect the yen to appreciate against the dollar. (C) financial capital stops moving. (D) a Japanese investor is guaranteed to make an additional 4 percent in yen terms by investing in the United States.

25. If net exports, X -M = $0, and the government sector has a deficit of $250 billion, then the private sector ______ (A) has a deficit that equals $500 billion. (B) has a deficit that equals $250 billion. (C) has a surplus that equals $250 billion. (D) has a surplus that equals $500 billion.

1. Which of the following is true about the corresponding marginal revenue curve when the demand is downward-sloping? (A) It is downward-sloping. (B) It is the demand curve under \( 1^{\text{st}} \) degree price discrimination. (C) It is steeper than the demand if there is no price discrimination. (D) All of the above.

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