In a certain economy, the components of planned spending are given by:C = 500 + 0.8(Y - T) - 300rI P = 200 - 400rG = 200NX = 10T = 150 Given the information about the economy above, which expression also states planned aggregate expenditure (PAE)?
A. [910 ? 700r ]
B. [790 ? 700r ] + 0.8Y
C. [790 - 700r ]
D. [910 ? 700r ] + 0.8Y
Answer: B
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Consider an industry with two firms producing similar products. Each firm's total cost (in dollars) is given below. Acme Manufacturing: TC = 100 + 3Q. Generic Industries: TC = 500 + 3Q. Which of the following statements is true?
A. Marginal cost at each firm depends on the level of output. B. Acme and Generic have the same marginal cost. C. Acme has greater economies of scale than does Generic. D. Acme has a lower marginal cost than does Generic.
National defense is considered a public good because there appears to be no limits to the nonrivalry-in-consumption characteristic, and exclusion of nonpayers is impossible. Are there any other goods that so perfectly meet both public goods criteria?
You have just noticed that the dollar appreciated and you suspect that U.S. policymakers were behind this change. Which would you choose as the most likely cause of this appreciation in the real exchange rate?
A. A decrease in the money supply B. A temporary increase in government purchases C. An increase in the money supply D. A temporary decrease in taxes
In the above figure, if the interest rate is 8 percent
A) people sell bonds so as to convert them into money. B) people buy bonds and the interest rate falls. C) the Fed increases the quantity of money. D) people buy stocks, because stocks are more liquid than currency.