Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The marginal rate of transformation in moving from Point A to Point B is
A. -2/3.
B. -1.5.
C. -3.
D. -30.
Answer: B
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When an economy is in equilibrium,
A) planned expenditures exceed production and income. B) there is no savings nor investment. C) government tax revenues equal planned government expenditures. D) production and income equal planned expenditures.
Consider the graph shown. What would most likely be the cause of a shift from S1 to S2?
A. A tax on sellers
B. A tax on buyers
C. A subsidy for sellers
D. A subsidy for buyers
Consider the market for portable air conditioners in equilibrium. When a heat wave strikes the equilibrium price
a. and quantity both decrease. b. and quantity both increase. c. increases, and the equilibrium quantity decreases. d. decreases, and the equilibrium quantity increases.
If the MPC is 5/6 then the multiplier is
a. 6/5, so a $200 increase in government spending increases aggregate demand by $240. b. 5, so a $200 increase in government spending increases aggregate supply by $1000. c. 6, so a $200 increase in government spending increases aggregate demand by $1200. d. 6/5, so a $200 increase in government spending increases aggregate supply by $1200.