You borrow $20,000 at an interest rate of 6% to open Candy Dan's, a gourmet sweet shop. If the return on your investment is ________, then you will earn an economic loss.
A. less than 6%
B. exactly 6%
C. greater than 6%
D. It is indeterminate from the given information.
Answer: A
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The smaller the MPC the ________ the expenditure multiplier and the ________ the effect of a change in expenditure on equilibrium output.
A. larger; smaller B. larger; larger C. smaller; smaller D. smaller; larger
In 2008, the Bank of England increased the country's money supply and lowered its interest rate. This policy was designed to
A) encourage people to buy more goods and services. B) shift the aggregate demand curve rightward. C) cause a movement up along the aggregate demand curve. D) Both A and B are correct.
What happens to the marginal revenue product curve of a factor as more of a complementary factor is hired?
A) It shifts to the left, because its marginal product decreases. B) It shifts to the left, because its marginal product increases. C) It shifts to the right, because its marginal product decreases. D) It shifts to the right, because its marginal product increases.
The stable outcome of the game in the figure shown will be:
A. Nike charges a high price, and Adidas charges a low price.
B. Nike charges a low price, and Adidas charges a high price.
C. Nike and Adidas both charge a low price.
D. Nike and Adidas both charge a high price.