In the aggregate expenditures model, assume that the MPC is 0.75 . An increase in investment spending of $6 billion would produce an ultimate increase in real GDP of:
a. $0.25 billion.
b. $0.75 billion.
c. $12 billion.
d. $24 billion.
d
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Assuming the inverse demand function for good Z can be written as P = 90 - 3Q, the corresponding total revenue function is:
A) 6Q. B) 90 - 6Q. C) 90 - 3Q. D) 90Q - 3Q2.
The long-run average cost curve may initially slope downward due to
A) decreasing average fixed costs. B) increasing marginal returns. C) economies of scale. D) All of the above.
A long run equilibrium: a. Will be at a greater output level than the natural level of real output. b. Will be at the natural level of real output
c. Will be at a smaller output level than the natural level of real output. d. Long-run equilibrium could be at any of the above levels of output.
If trade between two countries is voluntary, one can expect that
A. one country’s gain is necessarily the other’s loss. B. one country will exploit the other one. C. neither country really gains from trade. D. the larger country will always gain at the expense of the smaller. E. both countries expect to gain something.