Profit maximization by firms ensures that the equilibrium wage always equals the value of the marginal product of capital
a. True
b. False
Indicate whether the statement is true or false
False
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In the above figure, income is $8, the price of a soft drink is $1, and the initial price of a milkshake is $2. If the price of a milkshake decreases to $1, the income effect is the movement from point ________ to point ________
A) a; b B) b; d C) b; c D) a; c
Exports are:
A) positively related to the level of foreign income and negatively related to the exchange rate. B) positively related to the level of foreign income and positively related to the exchange rate. C) negatively related to the level of foreign income and negatively related to the exchange rate. D) negatively related to the level of foreign income and positively related to the exchange rate.
An example of entitlement spending is:
A. national defense. B. Social Security. C. police protection. D. garbage collection.
Government outlays
a. are the same as "G" in the short-run macro model. b. do not include transfer payments. c. are always smaller than government purchases. d. are always greater than government purchases. e. tend to decline in the long run.