If the MPC is 0.9, and the government cuts spending by $200b, the overall effect on GDP will be:
A. a decrease of $2,000b.
B. an increase of $2,000b.
C. a decrease of $1,800b.
D. an increase of $180b.
A. a decrease of $2,000b.
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Suppose that the quantity demanded for cars exceeds the quantity supplied of cars. We would expect that
A. the demand will decrease (demand will shift to the left to meet the supply. B. the price of cars will increase. C. the supply will increase (supply will shift to the right to meet the demand. D. the price of cars will decrease.
Use the following graph to answer the next question.
All else held constant, higher inflation in the United States relative to that in Canada will cause a(n) ________.
A. decrease in the supply of U.S. dollars B. decrease in the value of the U.S. dollar in terms of the Canadian dollar C. increase in the value of the U.S. dollar in terms of the Canadian dollar D. increase in the demand for U.S. dollars
A negative externality
a. is an adverse impact on a bystander. b. causes the product in a market to be under-produced. c. is an adverse impact on market participants. d. is present in markets where the good or service does not have any impact on bystanders.
If the long-run market supply curve is perfectly elastic, a fall in demand will cause the final equilibrium to be at:
A. the same price and the same output. B. a lower price and a lower output. C. a lower price but the same output. D. the same price but a lower output.