The multiplier is
A) the percentage of a given change in income that goes towards consumption.
B) the number which is multiplied by an autonomous change which gives the change in the equilibrium level of real GDP.
C) the part of consumption that is independent of the level of disposable income.
D) the proportion of total disposable income that is consumed.
B
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Suppose all firms in a perfectly competitive industry are earning an economic profit. One would expect that, over time, the number of firms in the industry will ________ and the market price will ________.
A. rise; stay the same B. fall; rise C. rise; fall D. rise; rise
An airlines realizes that instead of offering free checked in baggage, they could put a charge on checked baggage without the demand for the tickets decreasing. The space saved can be used to carry priority mail packages, with hardly any additional costs. The airlines has realized
a. Economies of scale b. Economies of scope c. Diseconomies of scale d. Diseconomies of scope
Consider a country Atlantica, using dollars ($) as its currency. If this country sets a price for gold, and then issues currency such that the amount in circulation is equivalent to the value of gold held in reserve, it is said to be following:
a. a gold exchange standard. b. a gold standard. c. a reserve currency standard. d. a crawling peg standard. e. a currency board standard.
Most firms have very little flexibility in their choice of input proportions
a. True b. False Indicate whether the statement is true or false