Firms believe that the current economic upturn will be long-lasting and have decided to hold a significant amount of excess labor. The government reports that the unemployment rate is 2.5%. The government has decided it needs to take very little action to stimulate the economy. In this situation the multiplier is likely to be
A. zero.
B. small.
C. large.
D. negative.
Answer: B
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Which of the following statements is TRUE?
A) An increase in the price of gasoline will decrease the demand for gasoline. B) An increase in the price of gasoline will increase the quantity demanded of gasoline. C) An increase in the price of gasoline will increase the supply of gasoline. D) An increase in the price of gasoline will increase the quantity supplied of gasoline.
In the table above, if there are 80 umbrellas produced, the deadweight loss from the 80th umbrella is
A) $10. B) $20. C) $30. D) $40.
Carla is spending all her income on only two goods: apples and bananas. The price of an apple is $2 and the price of a banana is $1 . If Carla's marginal utility of an apple is 4 and her marginal utility of a banana is 3, she should consume:
a. more apples and fewer bananas to maximize total utility. b. more bananas and fewer apples to maximize total utility. c. more apples and more bananas to maximize total utility. d. fewer apples and fewer bananas to maximize total utility. e. her current amounts of apples and bananas to maximize total utility.
Durable goods, nondurable goods, and services are part of __________ and fall in the category of ________
a. GDP; personal consumption b. GDP; gross private domestic investment c. GDP; government purchases d. national income; inventory e. national income; employee compensation