Whether the firm produces or shuts down in the short run, fixed cost is equal to
a. average variable cost
b. total cost
c. sunk cost
d. price
e. marginal cost
C
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A rent ceiling set below the equilibrium rent
A) ensures the availability of enough low-rent apartments in a city. B) results in all renters and potential renters being better off. C) creates a situation in which the quantity demanded of housing is greater than quantity supplied. D) ensures that landlords earn a reasonable rate of profit on apartments. E) eliminates discrimination by landlords.
The real-balance effect indicates that at higher price levels
A. the value of the dollar will increase. B. the purchasing power of money will increase. C. the real value of money holdings increase, resulting in increased saving. D. the real value of money holdings fall, resulting in decreased spending.
In an open economy with strong international trade, increases in government spending are likely to have an overall "crowding out" effect
Indicate whether the statement is true or false
If disposable income falls by $40 billion and consumption falls by $30 billion, then the slope of the consumption function is
A) 1.33. B) 0.75. C) 0.4. D) 0.3.