If MPC = 0.9, equilibrium real GDP is $1,000 . and full-employment real GDP is $2,000 . then how much should government spending change to bring about full employment?
a. +1,000.
b. ?100.
c. +900.
d. +100.
e. ?0.9.
d
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According to modern Keynesian analysis, an increase in aggregate demand leads to a higher price level because the
A) aggregate demand curve is upward sloping. B) short-run aggregate supply curve is upward sloping. C) aggregate demand curve is upward horizontal. D) short-run aggregate supply curve is vertical.
Refer to the above graph. It shows a profit-maximizing, purely competitive firm operating in the short run. Which area in the graph represents the amount of economic loss for the firm?
A. abef B. acdf C. bcde D. 0beg
If an economy is represented by a point along its production possibilities curve:
A. it can produce more of one product even if it does not produce less of another product. B. it can produce more of one product only if it produces less of another product. C. it cannot produce more of one product unless it stops producing the other product entirely. D. it cannot possibly produce more of one product, even if it produces less of another product.