Week 1 Answers
See pp. 17-20
1. Does a change in consumers tastes lead to a movement along the
d emand curve or a shift in the demand curve?
A change in consumers' tastes leads to a shift of the demand curve.
2. Does a change in price lead to a movement a
1. Who is responsible for setting moneta ry policy in the United States?
H int: Be more specific than The Fed.
The Federal Open Market Commit tee (FOMC) is responsible for setting monetary
policy in the United States.
I n detail, explain who is in this gr
1. Explain the difference between saving and investment as defined by a
To a macroeconomist, saving occurs when a persons income exceeds his consumption,
while investment occurs when a person or firm purchases new capital, such as a house
1. Which contributes more to GDP the production of an economy car or the production of a
luxury car? Why?
The production of a luxury car contributes more to GDP than the production of an economy car
because the luxury car has a higher market value.
2. A f
The slope of the blue curve measures the planes This element is
required for firefox to correctly compute the size of the hitarea. If it is
removed, the size of hitarea element will change when the dropdown is
displayed, causing the line to wrap different