If GDP were $4 trillion, I rose by $30 billion, and, the multiplier was 5, find the new level of GDP.
What will be an ideal response?
4,000 + (30 × 5) = 4,000 + 150 = $4,150 billion
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When a new firm considers entering a market, it takes into account only the profit it would make. What are the two external effects that occur in the market that the firm does not consider?
One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired. B. prices tend to adjust more quickly downward than upward. C. wages are sticky downward. D. input prices increase with output prices.
The major limitation of both the Keynesian approach and the monetarist approach is that both
A. focus on the determination of interest rates to the exclusion of price levels. B. study the determination of real GDP equilibrium without including the price level. C. are ways of studying the aggregate demand curve, but to learn anything about the price level and output, the aggregate supply curve must be included in the analysis. D. concentrate on interest rates without considering changes in consumption or net exports.
Philosophical issues regarding income redistribution deal with all of the following except
A. What is the ideal distribution of income? B. What is and is not possible? C. What is just? D. What is fair?