12. Which of the following is (are) likely to cause the marginal product of an input to decrease?
(A) an increase in the real price of the input
(B) a decrease in the quantity of the input used in production
(C) technological advances
(D) all of the above E) none of the above

13. If Figure 1 above is to show the result of a "fully accommodating" monetary policy following a shift of the IS curve from IS0 to IS1, what is the initial level of real income and interest rate before these changes? (A) 3500; 7.5%. (B) 4500; 12.5%. (C) 5500; 7.5%. (D) 4500; 2.5%.

14. In Figure 2 above, expansionary fiscal policy accommodated by the Fed can be pictured as a movement from points (A) A to D. (B) A to C. (C) D to B. (D) B to D. (E) A to B.

15. In Figure 3 above, an increase in autonomous exports will cause the ______ dollars to ______ and the exchange rate to ______, ceteris paribus. (A) supply of; shift to S1; rise (B) supply of; shift to S1; fall (C) demand for; shift to D1; fall (D) demand for; shift to D2; fall

16. Keynes argued that monetary policy would be impotent during the Great Depression because a (A) fall in interest rates would stimulate investment. (B) fall in interest rates would not stimulate investment. (C) rise in interest rates should not stimulate investment. (D) rise in interest rates would stimulate inv

17. In Figure 4 above, positive nominal GDP growth accompanied by higher inflationary expectations take us along path (A) A. (B) C. (C) E. (D) G.

18. In Figure 4 above, an adverse supply shock accompanied by a neutral policy take us along path (A) F. (B) G. (C) H. (D) A.

19. Frictional unemployment is reduced by ______ in the number of weeks one is eligible for unemployment compensation, and ______ in the price of gasoline. (A) an increase, an increase (B) an increase, a decrease (C) a decrease, an increase (D) a decrease, a decrease

20. Initially, the economy is at point B on Figure 5 above. According to the Solow growth model, an increase in the output per capital without an increase in capital per worker is represented by ______ and could be the result of ______. (A) the movement B to E; new technology discoveries (B) the movement B to H; improved health and education per worker (C) the movement B to C; an increase in the savings rate (D) the movement B to F; a decrease in the savings rate

21. Refer to Figure 6. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, Congress and the president would most likely (A) increase the money supply and decrease the interest rate. (B) increase taxes. (C) increase government spending. (D) increase oil prices. (E) raise interest rates.

22. Refer to Figure 6. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, and no fiscal or monetary policy is pursued, then at point B (A) the unemployment rate is very low. (B) firms are operating at below capacity. (C) the economy is below full employment. (D) income and profits are falling. (E) there is pressure on wages and prices to fall. 

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