1.The most commonly used measure for standard of living increases is an increase in the

a. aggregate demand

b. real GDP per capita

c. real GDP per worker

d. real GDP per dollar of capital stock

e. value of the dollar.

2.A news report claims that firms' expected rates of return are high as future business conditions are positive. What effect would this news have on the loanable funds market?

a. Interest rate increases and quantity of loanable funds increases

b. Interest rate increases and quantity of loanable funds decreases

c. Interest rate decreases and quantity of loanable funds decreases

d. Interest rate decreases and quantity of loanable funds increases

e. No change in interest rate and quantity of loanable funds increases

3.Which of the following is not a commonly heard argument in defense of protectionism?

a. Infant industries must be protected from foreign competitors

b. Too much reliance on foreign producers can be dangerous in times of war

c. The theory of comparative advantage

d. To protect against the practice of "dumping" from foreign competitors.

e. Domestic manufacturers are in need of protectionist policies in order to maintain current levels of employment.