A decrease in the price level results in a(n) ________ in the quantity of real GDP demanded because a lower price level ________ consumption, investment, and net exports
A) decrease; increases
B) increase; increases
C) decrease; decreases
D) increase; decreases
Answer: B
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If real salaries increase but nominal salaries do not, this means that
A) the purchasing power of money has decreased. B) prices have risen. C) prices have not changed. D) prices have fallen.
An increase in the user cost of capital leads firms to ________ their profit by ________ their capital-output ratio
A) raise, increasing B) raise, decreasing C) lower, increasing D) lower, decreasing
In the above figure, if d3 is the relevant demand curve for this firm, then which level of output will maximize this firm's profits or minimize its losses?
A) A B) B C) C D) D
The combined effect of changes in government purchases and net taxes can be determined by adding their individual effects
a. True b. False Indicate whether the statement is true or false