What are the main aspects of economic life that macroeconomics analysis is most concerned with?
What will be an ideal response?
There are four main aspects: unemployment, saving, trade imbalances, and money and the price level.
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Why is it that a monopolistically competitive firm cannot earn positive economic profits in the long run?
What will be an ideal response?
What are the characteristics of perfect competition?
What will be an ideal response?
The marginal propensity to consume represents
A) the level of consumption that occurs if disposable income is zero. B) the ratio of total consumption to disposable income. C) total income minus total taxes. D) the change in output caused by a one-unit change in autonomous demand. E) the change in consumption caused by a one-unit change in disposable income.
You have a bond that pays $125 per year in coupon payments. Which of the following would result in an increase in the price of your bond?
A) Coupon payments on newly-issued bonds rise to $140 per year. B) The likelihood that the firm issuing your bond will default on debt increases. C) The price of a share of stock in the company falls. D) Coupon payments on newly-issued bonds fall to $75 per year.