Those who desire that policymakers stabilize the economy would advocate which of the following when aggregate demand is insufficient to ensure full employment?
a. decrease the money supply
b. increase taxes
c. increase government expenditures
d. Do nothing and let markets correct themselves.
c
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Refer to Exhibit 10-5 When TE is $200 billion, what state is the economy in?
A) TE < TP, individuals are buying less output than firms produce. B) TE > TP, individuals are buying more output than firms produce. C) TE = TP, the economy is in equilibrium. D) TE < TP, individuals are buying more output than firms produce. E) TE > TP, individuals are buying less output than firms produce.
Homothetic goods are neither necessities nor luxuries, but rather lie on the borderline between them. ?
Answer the following statement true (T) or false (F)
A normal good is one
A) with a downward sloping demand curve. B) for which demand increases when the price of a substitute rises. C) for which demand increases when income increases. D) none of the above
Which of the following is characteristic of a firm that is a competitive price searcher?
a. The firm faces an upward-sloping demand curve. b. The firm faces an inelastic demand curve. c. The firm faces a horizontal demand curve. d. The firm produces a differentiated product.