When the quantity effect outweighs the price effect:
A. a price increase will cause a decrease in total revenue.
B. a price increase will cause an increase in total revenue.
C. a price decrease will cause a decrease in total revenue.
D. None of these is true.
A. a price increase will cause a decrease in total revenue.
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As real GDP ________, aggregate planned expenditure ________
A) decreases; remains the same, because it is independent from real GDP B) increases; remains the same, because the increase in some components is precisely offset by the decrease in others C) increases; decreases D) decreases; increases E) increases; increases
While many analysts defended the actions taken by the Fed and the Treasury to respond to the financial crisis in 2008, others were critical of these actions. The critics were concerned that by not allowing large firms to fail,
A) stockholders and bondholders of these firms were not allowed to receive the proceeds from the sale of assets that would have occurred if the firms had declared bankruptcy. B) there will be less competition in the U.S. economy, which could led to higher prices for consumers. C) smaller firms will resent not receiving similar assistance. D) there is an increased likelihood that other firms will engage in risky behavior in the future with the expectation that they will also not be allowed to fail.
In the Keynesian model, money demand is positively related to
A) income. B) interest rates. C) saving. D) aggregate supply.
The primary purpose of a strike by labor unions is to
A) force the firm out of business. B) extract from the firm better and improved conditions of work or contract terms. C) secure a larger market share for the firm. D) ensure they get paid for striking.