Investment happens when:
A.
Current income is greater than current spending
B.
Current consumption is greater than current output
C.
Resources are devoted toward increasing current output
D.
Resources are devoted toward increasing future output
D.
Resources are devoted toward increasing future output
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Refer to Figure 26-9. In the figure above suppose the economy is initially at point A. The movement of the economy to point B as shown in the graph illustrates the effect of which of the following policy actions by the Federal Reserve?
A) an increase in the required reserve ratio B) an open market sale of Treasury bills C) an open market purchase of Treasury bills D) a decrease in income taxes
Due to the entry and exit of firms in a monopolistically competitive market:
a. economic profits and economic losses are dissipated in the long run. b. economic profits persist in the long run, but not economic losses. c. economic losses will exist in the long run, but not economic profits. d. both economic profits and economic losses exist in the long run.
Figure 7-3
Government provides many goods and services to the public because they are not provided by free markets. Some economists believe bureaucrats who manage the programs have no interest in maximizing net benefits (profits) but instead maximize the size of a program constrained only by the need to have total benefits exceed total costs. Figure 7-3 shows total benefits and cost curves for a program. What point is the efficient point, and what point will the bureaucrat choose?
a.
A and B, respectively
b.
B and D, respectively
c.
D and C, respectively
d.
D and A, respectively
If purchases of eduction and medical care were counted as investment rather than consumption, GDP would
A) not change, because there is no change in total expenditures B) increase, because investment is included in GDP but consumption is not C) increase, because consumption is included in GDP, but investment is not D) decrease, because investment is weighed more heavily than consumption in GDP E) decrease, because consumption is weighed more heavily in calculating GDP