Chapter 9

1.2 wages

1.3 true

1.6 Airline seats are sold in advance and the airline needs to have as much cost information as
possible

2.1 the supply of money

2.3 right

2.7 0.2, 0.8

2.9 shift left

3.1 vertical

3.2 downward

3.3 Decrease and output will remain unchanged

3.5 Shift to the left leading to a large decrease in output and a small decrease in price

4.1 increase, increase, increase, decrease

4.2 decrease, increase, decrease, unchanged

4.3 below, rising, down

Chapter 10

1.1 increase

1.2 left, lowers, decrease

1.4 inside

1.5 a)

b) No

2.3 social security, Medicare

2.4 individual, businesses

2.6 smaller

Chapter 12

1.4 procyclical

2.2 $181.41, $190.48

2.3 decreases

2.4 fall

3.1 7%

3.2 decreases

3.5 dividends

3.9 a) Lower interest rates make borrowing less expensive increasing the total level of
investment

b) Lower expected corporate earnings increase investor expectations about future dividends
increasing the demand for stock and stock prices

4.1 false

4.2 deposit insurance

4.3 diversification