If the government decides to spend an extra $5 billion on fighter jets that they would otherwise have spent on road construction, and the MPC = 0.75, what is the effect on AD?
a. It has no effect
b. It increases by $5 billion.
c. It increases by $15 billion.
d. It increases by $20 billion.
a
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If you save more because Social Security motivates you to provide a greater level of inheritance for your children, then this is referred to by economists as the
A. slovenly effect. B. bequest effect. C. asset substitution effect. D. induced retirement effect.
Compared to perfect competition, a monopoly in the long run
A. produces a larger output. B. charges a higher price. C. produces the minimum average cost. D. All of these responses are correct.
Suppose a market is in equilibrium. The area below the market price and above the supply curve is:
A. total economic surplus. B. consumer surplus. C. producer surplus. D. the loss in total economic surplus.
Involuntary part-time workers are:
A. chronically unemployed. B. not counted as unemployed. C. short-term unemployed workers. D. considered out of the labor force.