Opportunity costs arise due to
a. Resource scarcity
b. Interest rates
c. Limited wants
d. Preferences
a
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Assume that the full-employment level of output is $500, and the price level associated with full-employment output is 100. Also assume that the economy's current level of output is $450 and, at the price level of 100, current aggregate demand is $400. If the government wants to move the economy back to the full-employment level of output and the MPC is 0.75, then it should
A. reduce government purchases by $25. B. increase government purchases by $25. C. increase government purchases by $100. D. reduce government purchases by $100.
When the rate of interest rises, the resulting change in the demand for capital is shown graphically by:
a. a movement down along the demand curve. b. a rightward shift of the demand curve. c. a leftward shift of the demand curve. d. a movement up along the demand curve. e. an outward rotation of the demand curve.
Assuming the economy in the graph shown is currently at equilibrium A, we can conclude:
A. there must be unemployment of resources. B. the economy is in a recession. C. the economy is producing less than its potential level of output. D. All of these are true.
A "market" is an arrangement that allows people to exchange things
Indicate whether the statement is true or false